Viasat, a worldwide communications company, and Inmarsat, a major UK-based supplier of global mobile satellite communications services, have announced the signing of a formal agreement under which Viasat will buy Inmarsat for $7.3 billion.
The merger will establish a global communications leader with increased size and breadth to link the globe more economically, safely and securely. The new organization’s complementary assets and resources will allow the launch of innovative new services in both the mobile and fixed segments, giving customers more options in broadband communications and narrowband services, such as IoT.
The merged business intends to combine both companies’ spectrum, satellite and terrestrial assets into a worldwide high-capacity hybrid space and terrestrial network able to offer exceptional service in the rapidly developing commercial and government sectors.
Together, these businesses will establish a formidable multi-spectrum, multi-orbit powerhouse. With production and people capacity around the world, the new company should become a major player in the future of connectivity. This alliance will provide faster speeds, extended bandwidth, improved bandwidth density in high-demand locations such as airports and shipping hubs, and reduced latency at a lower cost than any firm could supply on its own.
Viasat’s Executive Chairman Mark Dankberg commented: “This is a transformative combination that advances our common ambitions to connect the world. The unique fusion of teams, technologies and resources provides the ingredients and scale needed for profitable growth through the creation and delivery of innovative broadband and IoT services in new and existing fast-growing segments and geographies.”
The deal’s valuation is based on a combination of transactional components, including $850 million in cash, roughly 46.36 million shares of Viasat common stock valued at $3.1 billion, and the assumption of $3.4 billion in net debt. Nonetheless, a merger of this magnitude will undoubtedly attract the attention of competition regulators, and there will likely be some obstacles to overcome before this deal is approved.