Satellite firm bailed out by UK to be taken over by French rival

theguardian.com:

A satellite company part-owned by the British government is due to be taken over by an EU rival this week, dashing hopes of fostering a UK firm to rival Elon Musk’s Starlink following its taxpayer bailout at the height of the pandemic.

OneWeb, which provides services including broadband from its low-orbit satellites, will be taken over by one of its shareholders – the Paris-listed Eutelsat- in a deal that could be announced as early as Monday.

The deal, which will be billed as a merger, is expected to dilute the UK government’s near-20% stake two years after it ploughed $500m (£416m) into the business. The newly combined entity is expected to value the UK taxpayer’s stake at $600m, and will place it alongside existing Eutelsat shareholders including the French and Chinese governments. Paris and Beijing hold a 20% and 5% stake in Eutelsat, respectively.

Boris Johnson’s government invested in OneWeb in July 2020 in an attempt to save it from bankruptcy when it failed to secure funding in March that year to continue building out its planned fleet of 650 satellites.

The taxpayer-funded bailout was advocated by Johnson’s ex-adviser Dominic Cummings and came shortly after the UK was barred from accessing the EU’s Galileo satellite navigation system due to Brexit. The government initially argued that the stake would allow it to build a British alternative – a plan experts dismissed, since OneWeb’s communication satellites are radically different from those required for a navigation system.

A source with knowledge of the government’s approach to the Eutelsat deal – which has been under negotiation since the spring – said the UK had secured number of concessions. They include being able to veto sales of services that pose a risk to UK