The proposed merger between US satellite operator Viasat and British satellite telecommunications company Inmarsat, has received the blessing from the European competition regulator.

The European Commission announced that it has “approved unconditionally, under the EU Merger Regulation, the proposed acquisition of Inmarsat by Viasat.

The Commission concluded that the merger would not raise competition concerns in the European Economic Area (‘EEA’) or any substantial part of it.”

A SpaceX Falcon 9 rocket launches an Inmarsat satellite from Cape Canaveral, Florida. Image credit: SpaceX

Regulatory scrutiny

The approval comes after the UK’s Competition and Markets Authority (CMA) earlier this month approved the merger.

The US Federal Communications Commission has also greenlit the deal.

It was in November 2021 when US-based Viasat first revealed its intent to acquire British satellite telecommunications company Inmarsat for $7.3 billion, in order to “create a leading global communications innovator with enhanced scale and scope to affordably, securely and reliably connect the world.”

The deal however began to attract regulatory scrutiny. In July 2022 the European Commission signalled the deal would need its approval before it could be completed, and in August the CMA began its phase one investigation of the deal.

Both Viasat and Inmarsat operate their own satellite networks and provide two-way satellite communication globally to commercial customers and governments.

Viasat owns and operates four geostationary earth orbit (‘GEO’) satellites, while Inmarsat owns and operates fifteen GEO satellites.

Inmarsat and Viasat use capacity from their own GEO satellites to provide services in the nascent market for the supply of broadband in-flight connectivity (‘IFC’) services to commercial airlines.

The regulatory concern was that Viasat’s merger with Inmarsat could lead to airlines facing higher prices for on-board Wi-Fi, and potentially worsen Wi-Fi quality on-board.

EU approval

The CMA, after conducting a phase two investigation, found that – while Viasat and Inmarsat compete closely – the merged company will still be challenged by emerging and established competitors in the coming years, and therefore gave its blessing for the deal.

Now the European Commission has also added its approval, after also finding that “a number of sizable competitors would likely exert sufficient competitive pressure on the merged entity.”

“In-flight internet connectivity on commercial flights is set to become more and more common in Europe,” said Margrethe Vestager, executive VP in charge of competition policy. “Our in-depth investigation has shown that Viasat’s plan to buy rival satellite operator Inmarsat will not have a negative impact on the competitive landscape for this service.”

Margrethe Vestager.  European Commission

“Our extensive market investigation confirmed that sufficient choice among several credible providers will remain available for airlines to offer their passengers,” said Vestager.

The combined entity will likely compete against the likes of SpaceX’s Starlink, as well as established industry players – including Panasonic and Intelsat – both of which are also investing and entering into new sector partnerships with OneWeb for example.

Viasat and Inmarsat said in a statement that they expect the transaction to close by the end of this month.

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