Eutelsat in talks on possible all-share merger with U.K.’s OneWeb

“Investors don’t appreciate the uncertainty, and if ETL is in a merger of equals with OneWeb, then ETL investors get a share in a new entity where the other half is pretty much an unknown to them ... So I understand why ETL shares are down on the news,” said one trader in London.

A deal would strengthen both companies in the race to build a constellation of low-orbit satellites. But a tie-up would be politically sensitive, as it would bring together Indian billionaire Sunil Bharti Mittal, along with France, China and Britain as shareholders of the combined group. Eutelsat’s biggest shareholder is France’s state-owned investment bank Bpifrance, with a 20% stake. Its fourth-largest shareholder is China’s sovereign fund China Investment Corp, according to Refinitiv data.

Britain would retain special rights over OneWeb after the deal, another source said, including a veto over sales to clients deemed risky for security reasons, and a veto over a change in the location of its headquarters.

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