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Late 2025 Close Expected

SES $3.1 Billion Intelsat Takeover Seen Getting Regulatory OK

With legacy satcom operators seeing new competition from low earth orbit entrants and rapidly changing technologies, big scale and multi-orbit capabilities are "critical to success," SES CEO Adel Al-Salah said Tuesday in a call with analysts as the company announced its $3.1 billion purchase of Intelsat. Combined, the two will have a $9 billion backlog, a constellation of well more than 100 satellites covering 99% of the globe and revenue focused heavily on growth areas such as maritime and aviation connectivity, he said. The companies said the deal is expected to close in the back half of 2025, pending regulatory approval.

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SES/Intelsat will likely get that regulatory OK due to ample and increasing competition, as well as continuing declines in data prices, Dara Panahy, Milbank space lawyer, told us. Whether conditions are put on the deal is less clear, he said.

The announced deal -- following Viasat closing on Inmarsat mid last year (see 2305310003) and Eutelsat's purchase of OneWeb last fall (see 2309290013) -- doesn't necessarily signify yet more satcom consolidation imminently, but operators are likely looking closer at M&A opportunities in light of the activity, Panahy said. But being successful without scale will get increasingly harder, he said.

Intelsat brings 57 geostationary orbit satellites, while SES has 43, plus 26 medium earth orbit (MEO) satellites in its mPower constellation, Al-Salah said. "We are not just [a geostationary orbit] player, we are an all-orbit player," with eight software-defined GSOs coming between 2026 and 2027, he said. IT also has seven more mPower MEOS arriving by 2026 and two more for launch in early 2027, giving New SES lots of capability around its spectrum assets in the Ka, Ku, C, UHF, X and military bands, he said.

Predictions about more consolidation in the satellite market have existed for years because many operators suffer from chronic financial issues, Jeff Carlisle, Lerman Senter space lawyer, emailed. Consolidation is "happening, but very slowly," he said. "Satellite deals -- and certainly a satellite deal involving companies of this scale -- require overcoming tremendous technical, operational and regulatory hurdles, and dealing with large amounts of debt in today’s environment makes it even more difficult," he said. "But we may be seeing companies calculating that the cost of not doing a deal is worse."

When it comes to a regulatory and competition review of SES/Intelsat, the two will be able to argue that satellite service is very different from what it was a decade ago and there is much more competition in certain markets, Carlisle said. "They’re still going to have to explain why this doesn’t have an anticompetitive effect by concentrating the market in video delivery," he predicted.

The deal comes one year after the companies acknowledged they were discussing a combination and then said talks ended (see 2306220002). Back then, Intelsat was emerging from bankruptcy and SES was "also in a different state," Al-Saleh said. In addition, personnel is different now, he said. Al-Saleh became SES CEO in February (see 2310130030).

New SES will be headquartered in Luxembourg with a significant presence in the Washington area, Al-Saleh said.