France finds cash for ‘strategic asset' satellite firm Eutelsat
'The race is on. That's why we have to take a position now and invest now. Otherwise, the whole market will be occupied and France and Europe will depend on other powers in future,' Macron's office told AFP.
Part of an overall deal with other investors worth €1.35 billion, a new €717 million capital injection by the French state on Thursday will make Paris Eutelsat's largest shareholder, raising its stake from 13 percent to just under 30 percent – a threshold that would have required launching a full takeover bid.
The announcement comes as competition heats up in the satellite communications sector, where Elon Musk's Starlink is a dominant player but some governments would prefer sovereign solutions.
Boasting more than 600 satellites since merging with British firm OneWeb in 2023, Eutelsat is the world's second-largest operator of low Earth orbit (LEO) satellites, behind Starlink, making it the obvious candidate as a European champion.
The company has in the past called itself 'the only LEO alternative to Starlink'.
'Eutelsat is a strategic asset contributing to European strategic autonomy,' French Finance Minister Eric Lombard's office said.
But it remains far smaller than the American heavyweight, which has 6,000 satellites lofted into orbit by Musk's comparatively cheap, reusable SpaceX rockets.
Set to be completed by the end of this year, the capital increase is 'a pivotal step in Eutelsat's strategic and financing roadmap, enabling the execution of its strategic vision,' it said.
The money will fund a renewal of Eutelsat's satellite fleet and improve its financial situation, including through a debt restructuring.
Eutelsat is also gearing up to contribute to the Iris² network of European satellites in multiple orbits, supposed to offer communication services from 2030.
'The war in Ukraine has shown the importance of space infrastructure for resilient communications infrastructure, whether civilian or military,' Lombard's office said.
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'It has also spotlighted Europe's dependence on non-European technology.'
Musk has called Starlink the 'backbone' of the Ukrainian army because of its wide use defending against Russia's invasion since 2022 – and warned that 'their entire front line would collapse if I turned it off', sending Europeans scrambling for alternatives.
Eutelsat had already this week signed a 10-year, billion-euro deal at the Paris Air Show to provide military communications for the French armed forces.
And presenting its latest quarterly results last month, the firm said it was in active sales talks with governments both inside and outside Europe.
Major shareholders stumping up money alongside Paris are shipping giant CMA CGM, Indian telecoms operator Bharti Airtel and the FSP investment fund, owned by seven French insurance companies.
The two-stage plan includes a 'reserved' capital increase open only to the four named investors, with a second round open to others.
'Discussions are ongoing' with other investors including the British government, 'which could join the capital raise in due course,' Eutelsat said.
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