SES, a prominent satellite operator, has announced its acquisition of rival company Intelsat for $3.1 billion, marking a significant move in the evolving landscape of satellite communications. This acquisition, subject to regulatory approvals, is expected to reshape the industry’s dynamics and enhance the capabilities of both companies.
SES will pay $3.1 billion in cash, along with contingent value rights, to acquire 100% of Intelsat. The transaction, anticipated to close in the latter half of 2025, will be financed through SES’s existing cash reserves and additional debt. The combined entity is projected to generate approximately $4.1 billion in annual revenues and an estimated adjusted EBITDA of $1.9 billion in the current year.
The acquisition is poised to bolster SES’s multi-orbit space network, spectrum portfolio, ground infrastructure, and managed service solutions. Adel Al-Saleh, SES’s CEO, emphasized the importance of this move in navigating the rapidly evolving satellite communication landscape, characterized by heightened competition from emerging Low Earth Orbit (LEO) constellations.
The consolidation between SES and Intelsat unites two major players in the commercial Geostationary Earth Orbit (GEO) satellite market. This sector, once lucrative, has faced challenges due to declining demand from traditional television services and the emergence of LEO constellations such as SpaceX’s Starlink.
Both companies have a combined fleet of over 100 GEO satellites and the medium Earth orbit O3b constellation from SES. The acquisition is expected to yield capital expenditure savings, particularly in future non-GEO satellite systems, as highlighted by Al-Saleh.
The SES-Intelsat deal reflects a broader trend of consolidation within the satellite communications industry, following recent acquisitions such as Viasat’s purchase of Inmarsat and Eutelsat’s acquisition of OneWeb.
Rumors of a potential SES-Intelsat merger had circulated for years, with formal talks initiated in March 2023. Despite an initial setback, negotiations resumed, culminating in the current acquisition agreement. Al-Saleh underscored the alignment of both companies’ strategic visions and the value proposition presented by the deal.
Al-Saleh expressed confidence that the acquisition would not raise significant antitrust concerns, particularly in the United States, given the diversified nature of government spending across multiple satellite service providers.
The SES-Intelsat acquisition signifies a strategic response to the evolving demands and challenges within the satellite communications sector. By combining their resources and expertise, both companies aim to strengthen their position in a dynamic and competitive market landscape.
This acquisition marks a significant milestone in the trajectory of SES and Intelsat, promising enhanced capabilities and value for their clients amidst the ongoing transformation of the satellite communications industry.
