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UK
satellite firm Inmarsat agrees $7.3bn takeover by US rival
Viasat
Deal may be reviewed under National Security and Investment Act
because nature of business
The British satellite communications company Inmarsat has agreed
a $7.3bn (£5.4bn) takeover by the California-based Viasat,
becoming the latest UK tech firm to be taken over by a foreign
rival.
The deal is the latest in which a UK company that plays a key
role in Britain’s economy and national security is to be taken
over by foreign rivals or private equity firms. Inmarsat was
listed on the London Stock Exchange before being taken private
two years ago by a consortium including the private equity firm
Apax.
Viasat, which described the deal as “transformative” for the
global communications industry, said it intended to work with
the government to continue to invest and grow Inmarsat’s
presence in the UK.
“Viasat plans to preserve and grow Inmarsat’s London
headquarters,” the US company said, announcing the deal. “Viasat
plans to build on Inmarsat’s presence in the UK and is committed
to preserving and growing the investment of the combined company
in UK space communications.”
Inmarsat provides mobile satellite services that underpin email,
internet and video conferencing, as well as in-flight wifi. It
has 14 satellites in orbit and plans to launch another seven,
and supplied satellite services to the Ministry of Defence to
improve ground communications for troops fighting in
Afghanistan. It provides commutations services for ships as
well.
The company, whose technology was used in the hunt for the
missing Malaysia Airlines flight MH370 in 2014, employs about
860 people at its base in Old Street and 1,800 worldwide.
Viasat, which in 2019 had Priti Patel on a £1,000-an-hour
contract for five hours’ work a month as a strategic adviser
until she was appointed home secretary, said that it would
“cooperatively engage” with the UK government to continue to
operate in the country following the same commitments made by
the private equity consortium that took over Inmarsat two years
ago.
“Together, we can advance broadband communications and create
new hybrid space and terrestrial networks that drive greater
performance, coverage, speed, reliability and value for
customers,” said Mark Dankberg, Viasat’s executive chair.
Given the nature of Inmarsat’s business the deal may be reviewed
under the National Security and Investment Act 2021, legislation
brought in to protect key national assets from foreign takeover.
The government said it would continue to “closely monitor” the
deal, which will be subject to regulatory scrutiny in a number
of markets including the UK.
A spokeswoman for the Department for Business, Energy and
Industrial Strategy said: “The business secretary has powers
under the Enterprise Act 2002 to intervene in acquisitions which
raise public interest concerns. The government recently
strengthened those powers through the National Security and
Investment Act, which commences on 4 January 2022.”
In July, the government launched a review of the takeover of the
Welsh microchip manufacturer Newport Wafer Fab by Nexperia, the
Chinese-owned company that acquired the UK’s largest producer of
semiconductors.
In April, the government ordered an investigation into Nvidia’s
takeover of the Cambridge-based chip designer Arm, citing
potential national security concerns. Four months later, the
Competition and Markets Authority launched an in-depth
investigation into the deal after finding it raised serious
competition concerns.
“Joining with Viasat is the right combination for Inmarsat at
the right time,” said Rajeev Suri, the chief executive of
Inmarsat. “The industrial logic is compelling and ensures that
the UK has a strong and sustainable presence in the critical
space sector for the long term.”
Viasat, which has a UK base at Farnborough and supplies services
and products to the MoD, said it expected the combined company
to be able to make cost savings of $190m a year but did not
comment on potential job cuts.
“Decisions regarding management of the combined company
following the closing of the transaction will be made as part of
the integration planning process,” it said.
Inmarsat was set up in 1979 by the International Maritime
Organization, the UN’s maritime body, as an international
governmental organisation to enable ships to communicate with
shore and to call for help in emergencies. It was privatised in
1999 and floated on the LSE in 2005.
The company has struggled in recent years, however, and faces
increasing competition from rivals including Elon Musk’s SpaceX.
In July 2020 the government bought a £400m stake in the
satellite operator OneWeb in a post-Brexit effort to rival the
European Union’s Galileo system.
Mark Sweney
https://www.theguardian.com/business/2021/nov/08/uk-satellite-firm-inmarsat-agrees-73bn-takeover-by-us-rival-viasat
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Inmarsat owns and operates 14 satellites in geostationary orbit
35786km (22236 miles) above the Earth, delivering three
market-leading networks.
Geostationary satellites deliver operational, safety and
mission-critical connectivity services to organisations,
governments and individuals around the world.
Operating in the L-band, Ka-band and S-band, satellites enable
unparalleled breadth and diversity in the services Inmarsat
provide.
https://www.inmarsat.com/en/index.html
https://www.viasat.com/
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