Satellite company SES has agreed to buy Intelsat for $3.1 billion, bringing together two sizeable geostationary orbit (GEO) satellite operators in a market ramping up its Low Earth Orbit (LEO) constellations.
In its announcement, SES said that the acquisition of 100% of Intelsat will not be expected to close until the second half of 2025, and it is still subject to regulatory approvals.
The Luxembourg-based firm said the deal would allow for greater coverage, improved resiliency, and the expansion of its solutions, resources, and talent.
The acquisition will also allow SES to better meet growing Government demand for secure and reliable connectivity for mission-critical applications, bring improved services to the 3,000 connected aircraft, maritime businesses, and cruise line operators the pair serves, work with mobile operators on improved coverage, and more, it claimed.
Adel Al-Saleh, CEO of SES, commented: “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.”
“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.”
The merger comes just two years after talks broke down about a potential merger of the two providers amid a wave of consolidation in the sector. Before that, Intelsat filed for bankruptcy in 2020 but emerged in 2022 following a financial restructuring process, only for talks with SES to stall that summer.
The deal is agreed upon at a turning point for the satellite industry, which has seen a shift in focus from GEO satellites to LEO satellites.
As the name suggests, LEO satellites orbit the Earth at a lower altitude than GEO satellites — meaning they circle the globe at an increased speed, forcing more satellites to be launched in ‘constellation’ to follow one another and ensure consistent coverage of an area. GEO satellites, on the other hand, essentially stay stationary over one location of the Earth as it orbits at the same speed.
The two firms have over 100 GEO satellites combined, as well as medium earth orbit constellations.
GEO satellites were once the most popular satellite of choice. Still, the rise of LEO constellations, which offer connectivity more than five times faster than GEOs, like SpaceX’s Starlink, which has over 5,000 functioning satellites in orbit, has seen them come under increasing pressure.
Still, LEO constellations tend to cost more because they need to be tracked and monitored, and the effectiveness of GEO over LEO for various applications has been long debated by those in government and the private sector.