Eutelsat Communications (OTC: EUTLF ) and British satellite giant OneWeb have completed their all-share combination, forming the Eutelsat Group, announced on Thursday. This move situates the newly formed entity as a European contender to Elon Musk's space internet venture, Starlink. The combination was approved at the Ordinary and Extraordinary General Meeting of Eutelsat shareholders and has led to a surge in Eutelsat shares by about 3.5%.
According to InvestingPro's real-time metrics, Eutelsat Communications (ETL) has a market cap of 394.68M USD and a P/E ratio of 4.48. The company's revenue growth stands at 15.68% and it has maintained dividend payments for 17 consecutive years, as per InvestingPro Tips.
The Eutelsat Group, with its headquarters remaining in Paris, will continue to have OneWeb as a subsidiary operating commercially as Eutelsat OneWeb, maintaining its center of operations in London. The company remains listed on the Euronext Paris Stock Exchange and has applied for a standard listing on the London Stock Exchange.
OneWeb, on the other hand, operates with a significant debt burden, as indicated by InvestingPro Tips. Its market cap is 158.38M USD and its P/E ratio is -23.87, as per InvestingPro's real-time metrics. Despite its financial challenges, the company's network is already active and is set to be globally operational by the end of 2023.
The merger has strategically positioned Eutelsat Group to be a global leader in space communications. The combination of Eutelsat’s geostationary orbit (GEO) fleet with the low latency and ubiquity of OneWeb’s low Earth orbit (LEO) constellation aims to offer customers global, fully integrated connectivity services.
This combined GEO-LEO service will open up new markets and applications for customers, including Fixed Connectivity (Backhaul, Corporate networks), Government Services, and Mobile Connectivity (Maritime and Inflight). The group also plans to continue delivering innovative services for customers such as new IP native video services at the convergence of broadband and broadcast.
The combined entity is projected to grow at a double-digit revenue compound annual growth rate (CAGR) over the medium to long-term, reaching approximately €2 billion in 2027. Adjusted EBITDA for the combined entity is also expected to grow at a double-digit CAGR over the same period, outpacing revenue growth.
Dominique D’Hinnin, Chairman of the Board of Directors, expressed his confidence in the new combination, stating that they are prepared to offer connectivity and services that will support global economic and social development. Sunil Bharti Mittal, Vice-Président (Co-Chair) of the Board of Directors, echoed this sentiment, highlighting the transformative potential of the merger for communities and businesses worldwide. Eva Berneke, Chief Executive Officer, emphasized that Eutelsat Group is now uniquely positioned to offer a ubiquitous connectivity service.
The completion of this merger comes as competition intensifies within the multibillion-dollar space industry, which Morgan Stanley estimates could be worth more than $1 trillion by 2040. The Eutelsat Group aims to leverage its combined strategy, technology, and talent to deliver across several markets and verticals. For more insights and tips, readers can refer to InvestingPro, which offers additional relevant financial tips and real-time metrics.
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