Two satellite companies (Intelsat and OneWeb) are merging and Softbank is providing a $1.7 billion cushion. Intelsat will be the name of the new company, and it will be based in Luxembourg. The CEO said this:
We believe that combining Intelsat with OneWeb will create an industry leader unique in its ability to provide affordable broadband anywhere in the world.
Grey Wyler will be the executive chairman of the board. Softbank will purchase $5 per share and take a 39.9% voting stake. This will reduce Intelsat’s debt by $3.6 billion. Intelsat expects to finalize the deal by the end of the third quarter of 2017. The price of the stock is currently trading between $4.93 and $5.63.
In addition to Intelsat and Softbank, Qualcomm, Virgin, Coca-Cola and Airbus invested in OneWeb. Their space-based satellite Internet concept attracted these investors. Softbank had another motivation – this company pledged to invest $50 billion in the U.S.
Airbus is leading the satellite design effort for OneWeb. Arianespace and Virgin Galactic are working to launch the satellite into space. The first satellites are expected to orbit Earth next year. The satellite network would connect 4 billion people that don’t have access to the Internet.