In October, a major shift in the satellite industry took place with Intelsat's $3. 1 billion sale to its competitor, SES. This powerful pairing, involving the world's two largest geostationary satellite operators, is causing significant ripple effects. Armand Musey, an industry expert from Summit Ridge Group, noted that these giants drive a large portion of satellite manufacturing and launch orders. As a result, suppliers and companies further down the line are feeling the pressure and facing delays in deals.

Karl Schmidt, a managing director at KippsDeSanto, explained that major mergers can lead to a loss for suppliers. Temporary market sidelining of these companies means fewer deals happening, as they adjust their capital structures and deal with integration tasks. However, in the long term, this combination could result in a healthier company, becoming a stronger buyer in the middle market.

The challenge faced by fixed satellite service (FSS) providers like SES is not new. They've been trading below book value due to increasing competition, especially from SpaceX's Starlink, which operates in low Earth orbit (LEO). Additionally, SES's satellite TV business is also struggling with the shift to online streaming.

Both Intelsat and SES have been buying companies to become more vertically integrated as a response to these challenges. But these strategies might be halted for a while as the companies await regulatory approval and undergo integration processes. This could extend well into 2025.

Furthermore, the financial strain is affecting key satellite makers like Airbus Defense and Space, and Thales Alenia Space. Industry experts like Francois Chopard, CEO of Starburst, discuss possible mergers or restructuring in Europe for these companies. Demand for geostationary satellites is steadily dropping, with government projects becoming increasingly crucial. Despite Starlink's dominance, funding for startups aiming to disrupt the market remains strong.

Globally, the demand for sovereign space capabilities continues to grow. This complex merger highlights the evolving landscape of the satellite industry, with both challenges and opportunities on the horizon.

Space Merger Waves: SES and Intelsat Combine, Shaking the Industry

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