The UK’s Competition and Markets Authority (CMA) has given the green light for the $7.3bn acquisition of British satellite operator Inmarsat by its US peer Viasat, a deal first announced in November 2021.
The CMA had launched an investigation into the deal last year, fearing that it might reduce competition in the market for satellite-enabled video and data services. It initiated a Phase 2 review in October and published its initial findings in March, which were positive, but industry consultation was still required.
Following that process, the authority has now concluded that the merger of the two geostationary (GEO) satellite operators will not harm competition for services provided on flights used by UK customers.
The CMA said that the “satellite sector is expanding rapidly – a trend that is set to continue for the foreseeable future” due to increasing demand from the enterprise and consumer sectors.
It added that “a number of new operators have recently entered, or are planning to enter, the satellite communications sector to offer connectivity services for aircraft – these include Starlink, operated by SpaceX.”
The CMA also noted that other companies, such as Panasonic and Intelsat, will put competitive pressure on Viasat following recent agreements with low-earth orbit (LEO) satellite player OneWeb.
“The satellite communications sector is evolving at rapid pace – new companies are entering the market, more satellites are being launched into space, and firms are exploring and entering into new commercial deals. All the evidence has shown us that this merger will not substantially lessen competition in this dynamic and growing sector,” said Martin Coleman, chair of the CMA inquiry group.
Viasat and Inmarsat welcomed the CMA’s decision and said they expect to complete the transaction in the second half of 2023, subject to regulatory approvals and other customary closing conditions.
The deal will create a global leader in satellite communications, with combined revenues of over $4bn and a fleet of more than 20 GEO satellites covering all regions of the world. The merged company will also leverage Viasat’s expertise in LEO satellites and Inmarsat’s strength in mobile satellite services to offer enhanced connectivity solutions for various markets, including aviation, maritime, government, and enterprise.
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