July 11th saw the clearest indication that the long wait for SES to receive its permissions to acquire rival Intelsat is coming to an end, with the Federal Communications Commission (FCC) giving its approval to the transfer “of the control of licenses from Intelsat to SES”. This, in effect, ends the FCC’s oversight of the deal. SES has already received approval for the deal from the UK and European regulators.
The FCC said: “Based on our review of the record before us, we do not find any material public interest harms arising from the proposed transfers of control. Further, we find that the proposed transaction is likely to generate certain public interest benefits, including lower costs due to synergies and elimination of double marginalization, improved network quality, increased investment, national security benefits, and the creation of a more vigorous satellite competitor. Accordingly, we find that the transaction will serve the public interest, convenience, and necessity.“
On May 1st 2024, SES and Intelsat entered into a share purchase agreement pursuant to which SES would acquire 100 per cent of the outstanding shares and assets of Intelsat for $3.1 billion plus certain contingent value rights. The transaction will be financed from existing cash and equivalents and the issuance of new debt.
The FCC document adds: “SES will control the combined company, and no parties have raised issues with respect to the basic qualifications of the Applicants. Accordingly, pursuant to Commission precedent, we find that there is no reason to reevaluate the requisite citizenship, character, financial, technical, or other basic qualifications of SES or Intelsat under the Act or our rules, regulations, and policies. We also find that the Transaction will not violate any statutory provision or Commission rule.”
The document reveals that Eutelsat complained that the combined business “would control almost all satellite media distribution in the United States.” However, the Commission responded by saying that both Telesat and Eutelsat have contiguous US (CONUS) C-band coverage and substantial C-band satellite capacity available to serve media service customers.
The filing also shows that SES is prepared to clear a further 100 MHz or more of C-band capacity for relocation by the FCC.
The FCC concluded: “After carefully reviewing the record in this proceeding, we find that the proposed transaction will not violate the Act or the Commission’s rules. We further find that it is unlikely to have adverse competitive effects in the market segments in which the Applicants compete. At the same time, we find that the proposed transaction will generate various public interest benefits, including lower costs, improvements to network quality, investment, and national security, and the creation of a more vigorous satellite competitor. Accordingly, we find that approval of this transaction will serve the public interest, convenience, and necessity.”
