SES Confirms Merger Talks With Intelsat

SES headquarters. Photo: SES

SES confirmed the operator is in talks for a potential combination with fellow operator Intelsat. SES issued a statement Wednesday morning after Bloomberg reported the satellite companies are nearing a deal. 

“In response to rumors in the market, SES S.A. confirms that the company has engaged in discussions regarding a possible combination with Intelsat. At this stage, there can be no certainty that a transaction would materialize,” SES said in the March 29 statement. 

SES’s statement confirms longtime rumors. Last August, the Financial Times reported the two companies were in “active discussions.” 

Such a merger would bring together the two largest satellite operators for a combined fleet of more than 120 satellites in Geostationary Orbit (GEO) and Medium-Earth Orbit (MEO). SES operates more than 70 satellites, and Intelsat operates more than 50. 

Bloomberg reported the merger would create a $10 billion satellite giant and a deal could be finalized as soon as in the next few weeks. 

Last year Credit Suisse issued a report exploring potential synergies of various satellite operator combinations, estimating that in the event that SES and Intelsat merged, it could provide more than 30% uplift to the equity value. However, Credit Suisse noted one barrier to such a transaction is the Luxembourg government’s ownership stake in SES, which gives the government 33% of the voting rights.

The satellite industry is going through a period of consolidation to compete with SpaceX’s Starlink constellation and Amazon’s planned Kuiper constellation. Two major deals are already underway — Viasat and Inmarsat are going through regulatory approval to combine, and Eutelsat is going through a deal to combine with Low-Earth Orbit (LEO) operator OneWeb. 

Intelsat CEO David Wajsgras said in a November 2022 interview with Via Satellite that consolidation in the industry “makes sense.” 

“We believe that partnerships among satellite communications companies and bringing together complementary capabilities can drive competition and innovation,” Wajsgras said at the time.  “This benefits customers and people around the world who rely on seamless connectivity. It is clear that our industry is transforming, with new capabilities and technologies being brought to the market. Intelsat is focused on being a leader in that transformation.”

Dan Goldberg, CEO of fellow operator Telesat addressed Wednesday’s news during Telesat’s investor call, commenting it’s neither new nor surprising. The consolidation cycle, with Eutelsat and OneWeb and Viasat and Inmarsat is a good thing for the industry, he said. 

“It’s something that we’ve been anticipating for a while and I think it’ll help rationalize the supply-side of the equation,” Goldberg said.