Eutelsat And OneWeb

Eutelsat Communications (Euronext Paris: ETL) and key OneWeb shareholders have signed a Memorandum of Understanding with the objective of creating a leading global player in Connectivity through the combination of both companies in an all-share transaction. Eutelsat will combine its 36-strong fleet of GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.

The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100% of OneWeb (excluding the ‘Special Share’ of the UK Government). OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital[4].

The potential transaction builds on the deepening collaboration between Eutelsat and OneWeb, begun with the equity stake acquired by Eutelsat in OneWeb in April 2021, the global distribution agreement between Eutelsat and OneWeb announced in March 2022, and the new exclusive commercial partnership[5], addressing mainly the European and global cruise markets, signed today.

Commenting on the combination, Dominique D’Hinnin, Eutelsat’s Chairman said “I am delighted to announce this new and significant step in the collaboration between Eutelsat and OneWeb. Bringing together our two businesses will deliver a global first, combining LEO constellations and GEO assets to seize the significant growth opportunity in Connectivity, and deliver to our customers solutions to their needs across an even wider range of applications. This combination will accelerate the commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile. In addition, the combination carries significant value creation potential, anchored on a balanced mix of revenue, cost and capex synergies. The strong support of strategic shareholders of both parties is a testament to the huge opportunity that this combination offers and the value that will be created for all its stakeholders. This is truly a game changer for our industry.”

Sunil Bharti Mittal, OneWeb’s Executive Chairman said “Having played a pioneering role in providing connectivity in the emerging world, I am excited about the possibilities of connecting the unconnected. The combination of Eutelsat and OneWeb represents a significant development in that direction as well as a unique GEO/LEO combination. The positive early results of our service together with our strong pipeline represent a very exciting opportunity in the fast-growing satellite connectivity segment, especially for customers requiring a high speed, low latency experience. Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step. Bharti, as the lead shareholder of OneWeb, along with other key shareholders, is looking forward to playing a meaningful role in providing expanded connectivity through the combination of OneWeb and Eutelsat.”

Eva Berneke, Eutelsat’s Chief Executive Officer said “Our initial investment in OneWeb was underpinned by our strong belief that the future growth in Connectivity will be driven by both GEO and LEO capacity. This belief has intensified as our relationship with OneWeb has deepened, first by raising our stake in the company, and then with the global distribution agreement signed a few months ago. We are now moving to the next level, with a full combination that will ensure the potential of the GEO/LEO integration is fully realized, supported by compelling financial, strategic, and industrial logic. This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment, and Eutelsat’s pivot to Connectivity. The combined entity will be geared towards profitable growth, with strong medium-term cash flow generation and a rapid deleveraging driven by strong forecast EBITDA growth. The benefits for our customers and strategic partners, who are at the center of our strategy, are both significant and unique. This is also a very exciting opportunity for our employees who will be key to the success of this transformation.”

Neil Masterson, OneWeb’s Chief Executive Officer said “Just 20 months ago, OneWeb resumed its mission to connect the unconnected and remove the barriers to connectivity that hold back many of the world’s underserved economies and communities. Since then, we have turned this vision into reality and become the second largest low Earth orbit satellite operator in the world. Today’s announcement is another bold step in OneWeb’s remarkable journey. It is testament to the resilience, execution and innovation of our teams, the strong demand we have seen since launching our commercial services, and the close collaboration we have forged with our partners to provide high-speed, low latency connectivity for governments, businesses, and communities. This combination accelerates our mission to deliver connectivity that will change lives at scale and create a fast growing, well-funded company which will continue to create significant value for our shareholders.”

A compelling market opportunity

Eutelsat and OneWeb will address the considerable Connectivity market opportunity, which is fueled by the growing needs of customers in both the B2B and B2C segments for consistent, reliable connectivity. These market segments are forecast to grow by three and five times respectively over the next decade, to reach a combined value of circa $16bn by 2030, with growth being served by both GEO HTS and LEO capacity[6].

Moreover, the combination of the network density, compelling economics and high throughput of GEO with the low latency and ubiquity of LEO, creates the optimal solution to address an even wider range of customer needs, thereby expanding the addressable market.

A powerful combination, representing a game-changer in the industry

The operations of Eutelsat and OneWeb are highly complementary. A clear roadmap has been designed to develop over time a complementary GEO/LEO service including a common platform, hybrid terminals and a fully mutualized network creating a one-stop shop solution for customers, providing them with a unique offering and a seamless user experience.

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Boeing to Open Japan Research Center and Expand Sustainability Partnerships

Boeing will strengthen its partnership with Japan by opening a new Boeing Research and Technology (BR&T) center. The facility will focus on sustainability and support a newly expanded cooperation agreement with Japan’s Ministry of Economy, Trade and Industry (METI).

Boeing and METI have agreed to broaden their 2019 Cooperation Agreement to now include a focus on sustainable aviation fuels (SAF), electric and hydrogen powertrain technologies, and future flight concepts that will promote zero climate impact aviation. That is in addition to exploring electric and hybrid-electric propulsion, batteries, and composite manufacturing that will enable new forms of urban mobility.

“We are excited to open our latest global research and technology center here in Japan,” said Greg Hyslop, Boeing chief engineer and executive vice president of Engineering, Test & Technology. “Working with terrific partners like METI, the new center will expand upon Boeing-wide initiatives in sustainable fuels and electrification, and explore the intersection of digitization, automation and high-performance aerospace composites for greater sustainability in our future products and production systems.”

The BR&T – Japan Research Center will be located in Nagoya, which is already home to many of Boeing’s major industrial partners and suppliers. The facility will further expand Boeing’s research and development footprint in the region, which includes centers in Australia, China and Korea.

Boeing is fully committed to supporting Japan’s SAF industry and has been accepted as the latest member of ACT FOR SKY, a voluntary organization of 16 companies that works to commercialize, promote and expand the use of SAF produced in Japan. It was founded by Boeing airline customers All Nippon Airways (ANA) and Japan Airlines (JAL), along with global engineering company JGC Holdings Corporation, and biofuel producer Revo International.

Masahiro Aika, representative of ACT FOR SKY, said, “ACT FOR SKY welcomes the participation of Boeing. We look forward to Boeing collaborating with the other members to “ACT” for the commercialization, promotion and expansion of SAF in Japan.”

In addition to becoming partners in ACT FOR SKY, Boeing has a long history of innovating with ANA and JAL on sustainable aviation, which includes pioneering SAF-powered flights and launching the ground-breaking 787 Dreamliner. Today, they signed agreements to work together to study advanced sustainable technologies, including electric, hybrid, hydrogen and other novel propulsion systems in an endeavor to reduce the carbon footprint of aircraft.

Boeing Chief Sustainability Officer Chris Raymond added, “To ensure the enormous societal benefits of aviation remain available for generations to come, we must continue to partner with capable innovators and leaders to support the industry’s commitment to net zero carbon emissions by 2050. We are humbled to join ACT FOR SKY and collaborate with other members to share global best practices and help with the scale up and demand of SAF in Japan. And we are honored to open the Japan Research Center and expand our work with airline customers ANA and JAL on advanced technologies to realize zero climate impact aviation.”

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JetBlue and Spirit

JetBlue Airways Corporation (“JetBlue”) (NASDAQ: JBLU) and Spirit Airlines, Inc. (“Spirit”) (NYSE: SAVE) today announced that their boards of directors have approved a definitive merger agreement under which JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders’ approval of the transaction and a ticking fee of $0.10 per month starting in January 2023 through closing, for an aggregate fully diluted equity value of $3.8 billion¹ and an adjusted enterprise value of $7.6 billion.

“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” said Robin Hayes, chief executive officer, JetBlue. “We look forward to welcoming Spirit’s outstanding Team Members to JetBlue and together creating a customer-centric, fifth-largest carrier in the United States. Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines. This combination is an exciting opportunity to diversify and expand our network, add jobs and new possibilities for Crewmembers, and expand our platform for profitable growth.”

“Combining with Spirit will give JetBlue an even larger platform to deliver on our mission to inspire humanity,” said Peter Boneparth, chair of the board, JetBlue. “With the best Crewmembers and Team Members in the industry, our Board and leadership team look forward to building long-term sustainable value for all our stakeholders as an even stronger, more competitive low-fare airline.”

Ted Christie, president and chief executive officer, Spirit, said, “We are thrilled to unite with JetBlue through our improved agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers, and we look forward to working with JetBlue to complete the transaction. Bringing our two airlines together will be a game changer, and we are confident that JetBlue will deliver opportunities for our Guests and Team Members with JetBlue’s unique blend of low fares and award-winning service. We especially appreciate the commitment of our Spirit Family throughout this process. Today’s exciting announcement reflects JetBlue’s admiration for Spirit and a shared belief in what the combined airline can bring for our Guests.”