Eutelsat and OneWeb to combine: a leap forward in Satellite Connectivity

Press release - 26 July 2022 07:01

Eutelsat and OneWeb to combine: a leap forward in Satellite Connectivity Facebook

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Eutelsat and key OneWeb shareholders[1] sign a Memorandum of Understanding with a view to combining Eutelsat and OneWeb in an all-share transaction.

Eutelsat shareholders and OneWeb shareholders[2]would each hold 50% of the Eutelsat shares

Compelling financial profile with:

Potential for double-digit revenue and EBITDA CAGR over the medium to long term;

Eutelsat's strong cash flow generation providing visibility and funding to support continued expansion into the LEO market through OneWeb's next generation of satellites;

Over 1.5bn potential incremental value-creation after tax (net of implementation costs) stemming from revenue, capex and cost synergies.

Balanced board and governance structure, to include Eutelsat's Chairman and its CEO, OneWeb's Chairman, and a significant number of independent directors proposed by Eutelsat and OneWeb's shareholders, at Extraordinary General Meeting.

Fully backed by a strong set of strategic shareholders of both entities, including Bpifrance and Fonds Strat gique de Participations who have undertaken to vote in favour of the transaction-related resolutions at this EGM, subject to usual conditions. CMA CGM, a shareholder of Eutelsat, is also supporting the combination.

Representing a transformational transaction, built on the strong foundations established in April 2021 with Eutelsat's initial investment in OneWeb, this combination creates a global leader uniquely positioned to capture the Connectivity market with complementary GEO/LEO[3] offering.

Combined entity strongly positioned to address the fast-growing global Connectivity market.

The transaction values OneWeb at $3.4bn implying a value of 12 per Eutelsat share (including the dividend, before synergies).

Eutelsat to propose a 0.93 per share dividend with a scrip option in respect of FY 2021-22 at its upcoming AGM. Such dividend will not impact the exchange ratio.

Eutelsat will continue to be listed on Euronext Paris and apply for admission to standard listing on the London Stock Exchange.

Paris, London - 26 July 2022 - Eutelsat Communications (Euronext Paris: ETL) and key OneWeb shareholders have signed a Memorandum of Understanding with the objective of creating a leading global player in Connectivity through the combination of both companies in an all-share transaction. Eutelsat will combine its 36-strong fleet of GEO satellites with OneWeb's constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.

The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100% of OneWeb (excluding the Special Share' of the UK Government). OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital[4].

The potential transaction builds on the deepening collaboration between Eutelsat and OneWeb, begun with the equity stake acquired by Eutelsat in OneWeb in April 2021, the global distribution agreement between Eutelsat and OneWeb announced in March 2022, and the new exclusive commercial partnership[5], addressing mainly the European and global cruise markets, signed today.

Commenting on the combination, Dominique D'Hinnin, Eutelsat's Chairman said I am delighted to announce this new and significant step in the collaboration between Eutelsat and OneWeb. Bringing together our two businesses will deliver a global first, combining LEO constellations and GEO assets to seize the significant growth opportunity in Connectivity, and deliver to our customers solutions to their needs across an even wider range of applications. This combination will accelerate the commercialisation of OneWeb's fleet, while enhancing the attractiveness of Eutelsat's growth profile. In addition, the combination carries significant value creation potential, anchored on a balanced mix of revenue, cost and capex synergies. The strong support of strategic shareholders of both parties is a testament to the huge opportunity that this combination offers and the value that will be created for all its stakeholders. This is truly a game changer for our industry.

Sunil Bharti Mittal, OneWeb's Executive Chairman said Having played a pioneering role in providing connectivity in the emerging world, I am excited about the possibilities of connecting the unconnected. The combination of Eutelsat and OneWeb represents a significant development in that direction as well as a unique GEO/LEO combination. The positive early results of our service together with our strong pipeline represent a very exciting opportunity in the fast-growing satellite connectivity segment, especially for customers requiring a high speed, low latency experience. Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step. Bharti, as the lead shareholder of OneWeb, along with other key shareholders, is looking forward to playing a meaningful role in providing expanded connectivity through the combination of OneWeb and Eutelsat.

Eva Berneke, Eutelsat's Chief Executive Officer said Our initial investment in OneWeb was underpinned by our strong belief that the future growth in Connectivity will be driven by both GEO and LEO capacity. This belief has intensified as our relationship with OneWeb has deepened, first by raising our stake in the company, and then with the global distribution agreement signed a few months ago. We are now moving to the next level, with a full combination that will ensure the potential of the GEO/LEO integration is fully realized, supported by compelling financia

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