27 Jul 2022

Weil, HSF and MoFo advise on 'ground-breaking' $3.4bn satellite merger

Eutelsat and OneWeb are to combine in 50-50 structure, all-share deal

Herbert Smith Freehills (HSF), Morrison & Foerster (MoFo) and Weil Gotshal & Manges have advised in connection to listed French satellite firm Eutelsat’s agreement to merge with UK government-backed rival OneWeb, in a deal valued at $3.4bn. 

The all-share deal will see Eutelsat shareholders and OneWeb shareholders each hold 50% of Eutelsat’s shares, which are valued at €12 a share. 

Weil advised on legal aspects of the transaction for Eutelsat, while OneWeb was represented by HSF. MoFo, meanwhile, advised Japan's Softbank, which owns a major stake in OneWeb. 

OneWeb is a longtime HSF client. The firm was among those that acted on OneWeb’s $1bn bailout by the UK government when it filed for bankruptcy in 2020. Weil, Cravath Swaine & Moore and Milbank were also involved in the matter, which allowed for a full restart of OneWeb’s business. 

This time around, HSF’s team was led by OneWeb relationship partner Alan Montgomery, global M&A leader Gavin Davies and corporate partners Siddhartha Shukla in London and Hubert Segain in Paris. Partners Michael Jacobs, Veronica Roberts and David Coulling also worked on the deal, all in London. 

Meantime Weil’s team included M&A partner Murray Cox, who joined the firm’s London office last year following a rare departure from Slaughter and May. Cox worked with Paris partners Claude Serra and Agathe Soilleux. 

MoFo’s team was led by M&A partner Gary Brown, while regulatory advice for the transaction was provided by London partner Marie-Claire Strawbridge and Washington DC partners Nick Spiliotes and Charles Capito. The team worked with Desfilis Avocats on French law matters, led by M&A partner Alexandre Piette. 

Eutelsat already owned 23% of OneWeb’s shares prior to the deal talks, having made a significant investment last October. The move made it OneWeb’s second-largest shareholder behind India’s Bharti Enterprises, which took a 39% stake when it invested $500m in the start-up last summer. 

Eva Berneke, Eutelsat’s CEO, said: “This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment and Eutelsat’s pivot to connectivity.”

The combined entity said it is aiming to create a new leader in the market by bringing together Eutelsat’s 36-strong GEO satellite fleet with OneWeb’s 648-strong constellation of Low Earth Orbit satellites, with an estimated combined revenue of €1.2bn in the 2022/23 financial year. 

OneWeb’s CEO Neil Masterson said the deal marked “another bold step” in OneWeb’s journey in the 20 months since it filed for bankruptcy.

“This combination accelerates our mission to deliver connectivity that will change lives at scale and create a fast growing, well-funded company which will continue to create significant value for our shareholders,” he said. 


 

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