The UK’s Competition and Markets Authority (CMA) has opened a formal investigation into the proposed merger between Viasat and Inmarsat.
Viasat announced its intention to acquire Inmarsat for $7.3 billion in November 2021, a deal that immediately drew significant scrutiny from industry observers, customers and regulators.
Combined, the two companies would operate a constellation of 19 active satellites, with an additional 10 spacecraft currently in development and expected to launch within the next three years. This expanded fleet would deliver a global Ka-band coverage, supplemented by L-band capacity to provide all-weather resiliency and narrowband IoT services.
Supporters of the merger argue it will strengthen the merged company’s ability to compete with large, well-resourced rivals and accelerate investment in next-generation satellite services. Critics counter that the transaction could reduce competition, consolidate market power and limit choices for some customers.
Rajeev Suri, CEO of Inmarsat, said the combination would create “a new global player with the scale and scope to help shape the future of a dynamic and growing industry.” He added that the merger would position Inmarsat to offer broader choice to customers, expanded opportunities for partners, and new roles for employees, while helping secure a long-term UK presence in the strategic space sector.
The CMA has now launched its merger inquiry. It must decide whether to refer the deal for an in-depth ‘Phase 2’ investigation by 5 October 2022.
This move follows a separate probe by the European Commission, which responded last month to requests from 13 EU and EEA countries. The Commission said it accepted requests from Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Ireland, Italy, the Netherlands, Norway, Romania, Spain and Sweden to assess the proposed acquisition under EU merger rules.
The European Commission has indicated it will request a formal notification from Viasat; the transaction cannot be implemented until the Commission has been notified and granted clearance.
(Image Credit: Viasat)
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