Intelsat SA (NYSE:I) and OneWeb have merged. The duo’s definitive combination will get a $1.7 billion worth of investment from SoftBank Group Corp, which will be incorporated into the recently issued common and preferred shares of the new entity. Each of the two companies has exceptional strengths but they somewhat complement each other.
But the merger and the SoftBank investment are subject to other conditions
The merger will not just be a walk in the park and neither is the investment. Several conditions must be met including a successful conclusion on debt exchange offers to certain existing Intelsat bondholders. There is optimism that the debt exchange offers would reduce Intelsat’s debt by around $3.6 billion. While all is said and done and if no party opts out of the agreement, the deal is expected to come to a conclusion late in the third quarter of 2017. This is, however, subject to an endorsement by Intelsat and OneWeb shareholders.
Combining Intelsat with OneWeb is no mean feat
Combining the two entities has its unique long-term benefits according to Chairman and CEO of SoftBank, Masayoshi Son. The world is quickly embracing technological revolution and the two become the best outfits to manage any impending changes.
Applauding the combination the CEO of Intelsat, Stephen Spengler notes, “We believe that combining Intelsat with OneWeb will create an industry leader unique in its ability to provide affordable broadband anywhere in the world.”
OneWeb’s Founder and Executive Chairman, Greg Wyler outlines that the company has made significant strides over the past year. This has prompted the call for investment by SoftBank, which will come in handy in setting up of the world’s first truly global broadband company. This comes at a time when the demand for superior solutions in tackling the need for ubiquitous broadband is rapidly increasing.
Meanwhile, Spengler will take the leadership of the combined company while Wyler will take the Executive Chairmanship of Board of Directors of the combined company. All the parties will now cooperate in ensuring that the new entity retains a notable presence in the US market. In the meantime, Intelsat’s stock closed at $2.83 a fall of $0.13 or 4.39%.
