(Corrects paragraph 5 to say OneWeb "plans to offer affordable
internet services" from "offers affordable internet services")
Feb 28 OneWeb Ltd, a U.S. satellite venture
backed by Japan's SoftBank Group Corp, and debt-laden
satellite operator Intelsat SA on Tuesday agreed to merge
in a share-for-share deal.
SoftBank will buy voting and non-voting shares in the
combined company for $1.7 billion in cash.
The merger will allow Intelsat, which has a market value of
about $630 million, to address its roughly $15 billion debt
Luxembourg-based Intelsat has also been trying to slash its
debt through bond exchanges.
Both Intelsat and OneWeb, which plans to offer affordable
internet services with satellites, will benefit from the
increasing global demand for broadband services.
OneWeb shareholders will receive Intelsat shares in the
deal, while Intelsat shareholders will retain the shares they
currently hold, the companies said.
Any shares SoftBank will buy in the combined company will be
purchased for $5 per share in cash. The deal will give SoftBank
a 39.9 percent voting stake in the merged company.
Intelsat was an initial investor in OneWeb and took a
minority equity stake in 2015, while SoftBank announced a $1
billion investment in OneWeb late last year.
Guggenheim Securities and Goldman Sachs were financial
advisers to Intelsat, while Wachtell, Lipton, Rosen & Katz and
Elvinger Hoss and Prussen provided legal counsel.
PJT Partners was lead financial adviser to OneWeb and also
Shares of Intelsat were down 2 percent at $5.75 in light
premarket trading on Tuesday.
(Reporting by Narottam Medhora in Bengaluru; Editing by Sriraj
Kalluvila and Sai Sachin Ravikumar)