SES confirms talks with Intelsat about possible merger

Following reports that SES is in talks to merge with Intelsat, SES issued a short statement confirming discussions about a possible combination.

“At this stage, there can be no certainty that a transaction would materialize. The Board of SES remains fully committed to acting in the best interest of SES and its shareholders,” the SES statement said.

A report by Bloomberg, citing unidentified sources, said the companies are in advanced negotiations and aim to reach an agreement as soon as the next few weeks.

A transaction could value the combined business at more than $10 billion including debt but would need the blessing of the Luxembourg government, which is SES’s largest shareholder, Bloomberg noted.

Intelsat had no comment. “We do not comment on rumors and speculation,” Clay McConnell, SVP of corporate communications at Intelsat, told Fierce.  

More consolidation

A tie-up between SES and Intelsat would mark more consolidation among older, established players that are seeing new competition from Elon Musk and Amazon’s Jeff Bezos.

A merger between Luxembourg-based SES and U.S.-based Intelsat would lead to a lot of potential operational synergies, but the biggest challenge may be anti-trust concerns, especially in North America, according to Armand Musey, president and founder of Summit Ridge Group.

SES and Intelsat were both among the founding members of the C-Band Alliance that was formed in 2018 to protect their 3.7-4.2 GHz spectrum while clearing a portion of the C-band for 5G terrestrial wireless services. They later parted ways when they couldn’t agree on how the proceeds should be split.

Musey said he expects many customers of both SES and Intelsat to oppose the deal out of concerns that it will lead to less competition. SES and Intelsat are by far the largest providers of satellite capacity in North America for cable and content distribution.

SES got it mostly by buying GE Americom and Intelsat got it primarily by purchasing PanAmSat. “They may have to divest some of that,” he said.

Many incumbents with older technology are facing challenges from very high throughput operators such as Hughes and Viasat and LEO operators like Starlink, he said.

The price of satellite broadband capacity has dropped extremely rapidly over the last five or so years, and many operators, including SES and Intelsat, base their revenues largely on traditional wide beam satellites that have nowhere near the capacity of new ones that are going up, he added.