UK competition authorities have opened an investigation into US-based Viasat’s $4bn acquisition of UK maritime communications company Inmarsat.
The Competition and Markets Authority (CMA) said it is considering if the deal would result in a “substantial lessening of competition” within any market or markets in the UK.
Interested parties have until 15 August 2022 to submit their views on the acquisition, which would create the world’s largest geostationary satellite company.
California-based Viasat will buy Inmarsat for $850m in cash and $3.1bn in stock and will assume $3.4bn in debt, under the deal.
The merged entity would control a fleet of 19 satellites, with 10 more under construction for launch in the next three years.
The transaction is seen by the market as an attempt to counter rising competition from firms including Elon Musk’s Starlink and OneWeb.
UK officials have been stepping up scrutiny of deals involving foreign investors under a new national security law, reported Bloomberg.
The inquiry also comes hot on the heels of French satellite operator Eutelsat’s proposed merger with UK rival OneWeb, which is partly backed by the UK government.
In late June, shareholders of Viasat voted in favour of the takeover of Inmarsat in a move described by Visat chief executive Richard Baldridge as an important milestone in completing the acquisition.
Buying Inmarsat will also help Viasat diversify its revenues away from heavy reliance on the US.
Late in 2021, it was reported that Inmarsat’s private equity owners were considering a sale of the company they bought in 2019 for $3.4bn.
Apax Partners and Warburg Pincus bought the company in partnership with the Canada Pension Plan Investment Board and Ontario Teacher’s Pension Plan Board.
Inmarsat was set up in the 1970s as a United Nations-linked marine safety vehicle and listed in London in 2005 when digital communications took off as a money-spinner.
