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Satellite Industry 2012 Mergers and Acquisitions: By The Numbers (Part Two)

By Jeffrey Hill | November 30, 2012

      [Satellite News 11-30-12] 2012 has seen some key deals in the satellite sector. Yesterday, we looked at deals such as DigitalGlobe acquiring GeoEye, MDA acquiring Space Systems/Loral and Cobham acquiring Thrane & Thrane. Here, we look at some of the other major deals that have shaped the sector this year. 

      Panasonic Avionics Acquires Majority Stake in AeroMobile (March – $400 million)
            In-flight entertainment and communications provider Panasonic Avionics was already having an extremely productive year when it acquired a majority stake in AeroMobile Communications in March. The agreement was valued at nearly $400 million, based on the list prices of the systems and spares.
            AeroMobile’s previous sole owner Telenor remains the only other shareholder and will continue its telecom partnership with the company. The transaction is an important one for Panasonic as AeroMobile’s eXPhone product is a key element in Panasonic’s long-term in-flight connectivity and communications strategy. Panasonic currently offers the eXPhone in-flight mobile phone service in collaboration with AeroMobile.
            Panasonic Avionics President and COO Yasu Enokido said the transaction was a natural extension of Panasonic Avionics’ longstanding partnership with AeroMobile and believes that customers of both companies would benefit from an increased level of integration as a result.
            AeroMobile continues to operate as an independent company, offering its branded in-flight voice and data services. Panasonic said the company would also continue to maintain and expand its global telecom roaming agreements.
      Embraer, Telebras Merge on Brazilian Communications Satellite ($352 million)
            In November, Brazil’s Council for Economic Defense (CADE) approved a partnership between Embraer and Telebras that was formed to create Visiona Tecnologia Espacial and acquire and develop a Brazilian geo-stationary satellite, which is projected to require $352 million from the merged entity to complete. According to the deal, Embraer will have 51 percent of the company, while Telebras will represent the Brazilian government with 49 percent. Telebras will operate the satellite planned to launch in 2014 and the Brazilian government aims to use the satellite to expand broadband internet coverage throughout the country.
            Embraer’s Executive Vice President of Finance and Investor Relations José Antônio Filippo announced that the government would issue $24.5 million for Embraer and Telebras to initiate Visiona Tecnologia Espacial, an integrated satellite company. The initial focus of the joint company is to provide support to the Brazilian Geostationary Satellite, a civil-military strategic communications spacecraft. Visiona will be responsible for the absorption of technologies from foreign companies that are contracted to supply parts of the satellite.
            Telebras has also supplied fourteen municipalities in Rio Grande do Sul with cheap broadband within the National BroadBand Plan (PNBL) with the activation of a network connection. According to a company statement, this is due to a signed agreement with Coprel Telecom to allow the offering of a 1 Mbps service for a price of up to approximately $17.
      Eutelsat Acquires Asia-Pacific Satellite from GE Capital ($228 Million)
            Not all mergers and acquisitions involved assets on paper. In June, Eutelsat Communications acquired the GE-23 satellite from GE Capital for $228 million and renamed the spacecraft Eutelsat 172A. The transaction closed in the second half of 2012. Eutelsat said that the purchase was financed through its existing liquidity and that it expects the deal to add to earnings per share and EBITDA margin in the first year following the deal.
            GE-23 was built by Thales Alenia Space and launched in December 2005 to serve the Asia-Pacific region from the 172 degrees East orbital slot.
            The satellite provides Eutelsat with a payload of 20 Ku-band transponders accessing five interconnecting beams and 18 C-band transponders connected to a trans-Pacific beam. GE-23 also offers a broad range of telecom services to a diverse base of blue chip customers that will be integrated into the Eutelsat fleet.