(April 29): SES SA and Intelsat SA have revived discussions on a potential merger to create a satellite giant after a previous attempt faltered last year, according to people familiar with the matter.

The two companies are working with advisers as they resume negotiations on a possible combination, said the people, asking not to be identified as the matter is private. Intelsat, which emerged from bankruptcy in 2022, could also draw takeover interest from other satellite companies, the people said.

SES depositary receipts fell as much as 9.7% in Paris trading, giving the company a market value of about €2.2 billion (RM11.21 billion). Deliberations are ongoing and there is no guarantee that the talks will result in a deal, the people said.

Representatives for SES and Intelsat declined to comment.

SES and Intelsat held discussions last year to create a satellite giant that can better compete with billionaire Elon Musk’s Starlink broadband internet service. A transaction could have valued the combined business at more than US$10 billion (RM47.65 billion) including debt, people familiar with the matter said at the time. However, the talks collapsed after Intelsat failed to reach an agreement with SES and its major stakeholders on the future direction of the business. Luxembourg-based SES counts the small European nation’s government as its biggest shareholder.

A deal between the two companies would follow other consolidation in the sector, prompted by the high capital outlays required to build satellites and send them to space. In 2021, California-based Viasat Inc announced it would acquire Britain’s Inmarsat Group Holdings Ltd, and in July 2022 France’s Eutelsat SA agreed to combine with UK-backed low-earth orbit venture OneWeb Ltd.

Intelsat emerged from bankruptcy in 2022, cutting its US$16 billion debt in half. The company was founded in 1964 as an intergovernmental consortium and broadcast the first moon walk, before being privatised in 2001. Private equity firms BC Partners and Silver Lake bought it in 2008.