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(Corrects paragraph 5 to say OneWeb "plans to offer affordable internet services" from "offers affordable internet services")
Feb 28 (Reuters) - 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 pile.
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 advised SoftBank.
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)