The longstanding rumours about a possible merger between satellite operators Intelsat and SES, to create an entity valued at over US$10 billion, have finally been put to rest after Intelsat reportedly walked away from the discussions. Luxembourg-based SES confirmed that talks with its US-based rival “have ceased” in a statement on 22 June. The news came less than three months after it publicly admitted that it was engaged in discussions with Intelsat after months of speculation in the media.
Although neither company has officially given more details about the break-up, it has emerged that the two parties were unable to agree on certain business priorities. It is believed that questions were posed about whether a combined entity would generate more value than if Intelsat continued on its own.
The news comes just weeks after SES CEO Steve Collar unexpectedly announced his resignation, effective at the end of June, after over 20 years at the company. The abruptness of Collar’s departure following the collapse of merger discussions with Intelsat has prompted conjecture about a link between the events.
The potential combination of SES and Intelsat, two of the traditional “Big Four” fixed-satellite service (FSS) operators, garnered much interest from the industry, which has seen increasing consolidation as companies seek to better compete in a satellite communications market shifting from video broadcast to data services. At the end of May, Viasat completed its acquisition of Inmarsat while Eutelsat is in the process of merging with OneWeb.
A merger between the two operators would have created a group with around US$4bn of annual revenues. Courtesy: SES / Intelsat
