Paris, France – European satellite telecommunications provider SES said Wednesday it is exploring a possible merger with US rival Intelsat in what would be another tie-up in the sector as the race for space-based internet service heats up.
“In response to rumors in the market, SES S.A. confirms that the company has engaged in discussions regarding a possible combination with Intelsat.”
The firm added there is no certainty that a transaction will take place.
The satellite communications sector has been seeking to consolidate in the wake of the arrival on the scene of billionaire players Elon Musk and Jeff Bezos.
The sector is now notably awaiting the upcoming merger of France’s Eutelsat with UK counterpart OneWeb, as well as that of US provider Viasat and Britain’s Inmarsat.
According to Bloomberg, a tie-up between SES and Intelsat would lead to the creation of a $10 billion plus group — debt included — in a merger that would need the nod of Luxembourg government, SES’s top shareholder.
Shares in the European group rose 3.7 percent on the Paris stock exchange after briefly jumping ten percent.
Intelsat has bounced back strongly after in May 2020 being placed in chapter 11 bankruptcy after which it embarked on a mass restructuring to expunge its debt pile.
Launched in the 1960s as an intergovernmental consortium tasked with promoting international telecoms via satellite, then privatized in the early 2000s, Intelsat now has more than 50 geostationary satellites.
SES for its part last year generated sales closing in on two billion euros ($2.15 billion), a nine percent increase.
But it ended the year in the red with net losses of 34 million euros as video transmission receipts slid amid competition from fiber-optic video streaming services.
The groups distribute transmission capacity to more than 8,000 TV broadcasters across the globe.