SES to Acquire Intelsat Holdings in $3.1 Billion Deal

SES has announced its agreement to purchase Intelsat Holdings for $3.1 billion, a move that would establish a significant European presence in the satellite industry. However, concerns over debt have prompted investor unease, leading to a record low in SES’s share price.

SES to Acquire Intelsat Holdings in $3.1 Billion Deal
SES to Acquire Intelsat Holdings in $3.1 Billion Deal

European satellite firms are currently seeking consolidation to better compete with industry giants like Elon Musk’s Starlink and Amazon’s Project Kuiper.

Investor Reaction and Debt Concerns

While the move towards scale was initially welcomed by analysts, apprehensions have arisen regarding its effectiveness in narrowing the gap with US competitors. Additionally, concerns over the debt burden assumed by SES in the acquisition have contributed to a significant decline in its share price.

The combined entity would possess a fleet comprising over 100 geostationary and 26 medium-Earth-orbit satellites. However, this pales in comparison to Starlink’s orbiting fleet of approximately 5,800 satellites.

Financial Details and Financing

The deal, endorsed by both companies’ boards, is expected to conclude in the second half of 2025 and will be funded through a combination of cash and new debt, including hybrid bonds.

Analyst Antoine Lebourgeois expressed concerns about the combined entity’s potential high leverage, particularly amid escalating debt costs and diminishing capital returns for traditional operators.

Rationale for the Deal

SES CEO Adel Al-Saleh highlighted the regulatory ease of an acquisition compared to a merger, along with Intelsat’s emergence from bankruptcy, as factors driving the agreement.

The new entity will be headquartered in Luxembourg and maintain a significant presence in the US. It is anticipated to generate synergies with an estimated net present value of €2.4 billion.

The acquisition of Intelsat Holdings marks a strategic move for SES to bolster its position in the satellite industry. However, managing debt concerns and competing with established US rivals remain key challenges for the newly formed entity.



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