(Updates shares, adds comment from industry consultant)
By Pushkala Aripaka
Nov 8 (Reuters) - Viasat agreed to buy British
rival Inmarsat on Monday in a $7.3 billion deal to broaden the
U.S. based company's satellite and land-based communications
services.
The takeover of London-based Inmarsat comes just two years
after it was taken private in a $3.4 billion deal by a
consortium of British-based Apax partners, U.S.-based Warburg
Pincus and two Canadian pension funds.
While Viasat offers connectivity and communications services
to residential, aviation and defence customers in North America,
Inmarsat is a provider of satellite-based communications
services to shipping, aviation and government departments,
including Britain's Ministry of Defence.
Viasat's shares fell sharply and were down nearly 13% at
1815 GMT following news of the cash and equity acquisition,
which is likely to attract the attention of British regulators,
who have probed transatlantic takeover such as Ultra Electronics
and Meggit on security grounds.
"The combined company will cooperatively engage with the
U.K. government with a view to operating in the U.K. consistent
with the commitments previously made by Inmarsat," the companies
said in a joint statement announcing the transaction.
The deal to buy Inmarsat includes $850 million in cash,
about 46.4 million of Nasdaq-listed Viasat's shares valued at
roughly $3.1 billion and the assumption of the British firm's
$3.4 billion net debt, the companies said in a joint statement https://www.inmarsat.com/en/news/latest-news/corporate/2021/viasat-inmarsat-to-combine.html.
Viasat said it has signed up for $2.3 billion of new debt
facilities to partially fund the deal as it also reported its
second-quarter results.
"Joining with Viasat is the right combination for Inmarsat
at the right time," said Rajeev Suri, a former Nokia executive
who became Inmarsat Chief Executive in February. Inmarsat was
subject of an investigation https://www.reuters.com/article/us-inmarsat-m-a-regulator-clearance-idUSKBN1X82BU
in 2019 when it was taken private.
"The deal suggests ViaSat is very serious about its
ambitions of rolling out its cutting-edge high throughput
satellite technology globally instead of using regional
partnerships," Armand Musey, founder of financial consulting
firm Summit Ridge Group said.
"The big question is whether we will see a counter bid from
another operator."
(Reporting by Pushkala Aripaka in Bengaluru; additional
reporting by Yadarisa Shabong; Editing by Krishna Chandra Eluri,
Anil D'Silva and Alexander Smith)
