SES to acquire Intelsat in US$3.1bn deal

Source: SES

In a development long-awaited by the industry, satellite operator SES is to acquire rival in a US$3.1 billion deal.

SES will acquire Intelsat through the purchase of 100% of the equity of Intelsat Holdings for $3.1 billion in cash and certain contingent value rights.

The pair said that the combination will create a stronger multi-orbit operator with greater coverage, improved resiliency, expanded solutions, enhanced resources to profitably invest in innovation, and benefit from the collective talent, expertise, and track record of both companies.

The pair say they expect to deliver total synergies equivalent to 85% of the total equity value of the transaction – €2.4 billion in total – with 70% of this realized within three years after closing.

SES and Intelsat say that the combined company will derive over 60% of revenue from the growing networks segment, implying that their exposure to the declining legacy video business is limited.

The combination will have an order backlog of €9 billion, revenue of €3.8 billion and adjusted EBITDa of €1.8 billion.

The deal has been unanimously approved by the board of directors of both companies. Intelsat shareholders holding approximately 73% of the common shares have entered into support agreements requiring them to vote in favour of the transaction.

The acquisition is subject to regulatory clearances and filings and provisions concerning cooperation and measures in seeking regulatory clearances, which are expected to be received during the second half of 2025.

Competition with new entrants

The combination of SES and Intelsat will create a large European-based satellite player (it will remain headquartered in Luxembourg). Dominant in the GEO segment, it will in theory be better placed to compete with up and coming low-Earth orbit players such as Elon Musk’s Starlink, as the focus of satellite communications switches away from legacy video services towards high-speed connectivity.

Both players are strong in GEO, but SES has also invested in a new MEO constellation to complement this for networks applications, O3b mPOWER. Intelsat’s plans in this area are at an earlier stage and will now presumably be superseded by the acquisition.

SES had previously been in talks with Intelsat about a combination about a year ago, but the US-based operator has since emerged from Chapter 11 and is in a stronger financial position, which may have helped oil the wheels.

Adel Al Saleh

Adel Al-Saleh, CEO of SES, said: “This important, transformational agreement strengthens our business, enhances our ability to deliver world-class customer solutions, and generates significant value for our shareholdersin a value accretive acquisition which is underpinned by sizeable and readily executable synergies.

In a fast-moving and competitive satellite communication industry, this transaction expands our multi-orbit space network, spectrum portfolio, ground infrastructure around the world, go-to-market capabilities, managed service solutions, and financial profile. I am excited by the opportunity to bring together our two companies and augment SES’s own knowledge base with the added experience, expertise, and customer focus of the Intelsat colleagues.

“Going forward, customers will benefit from a more competitive portfolio of solutions with end-to-end offerings in valuable Government and Mobility segments, combined with value-added, efficient, and reliable offerings for Fixed Data and Media customers. This combination is also positive for our supply chain partners and the industry in creating new opportunities as satellite-based solutions become an increasingly integral part of the wider communications ecosystem.

“Our expanded business will deliver sustained EBITDA growth and strong cash generation, in turn supporting incremental profitable investment in capabilities and solutions to fulfil rapidly expanding and evolving customer demand while also delivering sustained returns to shareholders.”

David Wajsgras, CEO of Intelsat, said: “Over the past two years, the Intelsat team has executed a remarkable strategic reset. We have reversed a 10-year negative trend to return to growth, established a new and game-changing technology roadmap, and focused on productivity and execution to deliver competitive capabilities. The team today is providing our customers with network performance at five 9s and is more dedicated than ever to customer engagement and delivering on our commitments. This strategic pivot sets the foundation for Intelsat’s next chapter.

“By combining our financial strength and world-class team with that of SES, we create a more competitive, growth-oriented solutions provider in an industry going through disruptive change. The combined company will be positioned to meet customers’ needs around the world and exceed their expectations.”