Competition & Markets Authority
Satellite merger approved after in-depth CMA probe
Following a provisional clearance in March, the CMA is now allowing the proposed merger of Viasat and Inmarsat to go ahead.
- Phase 2 investigation finds that – while Viasat and Inmarsat compete closely – the merged company will be challenged by emerging and established competitors in coming years
- Satellite communications sector is expanding, a trend that is expected to continue
Both Viasat and Inmarsat supply businesses globally with satellite connectivity that enables services such as the internet, email, and video calling – including for use on aircraft.
Last October, the Competition and Markets Authority (CMA) referred the deal to a Phase 2 review after its initial, Phase 1, inquiry identified concerns that warranted further investigation.
Since then, an independent CMA panel has gathered and analysed a wide range of evidence in order to understand the sector, as well as the potential impact of the merger. Amongst other things, this included a significant number of internal documents – from both the merging companies and their competitors – evidence from airlines; the CMA’s own analysis of sector conditions; and how these could change in the future.
In a Phase 2 review, the panel considers whether it is more likely than not that a deal will substantially lessen competition – a higher threshold than Phase 1. Accordingly, some mergers that are referred to Phase 2 will ultimately be cleared.
The evidence analysed by the panel shows that, while Viasat and Inmarsat compete closely– specifically in the supply of satellite connectivity for wifi on flights – the deal does not substantially reduce competition for services provided on flights used by UK customers.
The evidence also shows that the satellite sector is expanding rapidly – a trend that is set to continue for the foreseeable future. This is due to increased demand for satellite connectivity, driven largely by the ever-growing use of the internet by business and consumers.
A number of new operators have recently entered, or are planning to enter, the satellite communications sector to offer connectivity services for aircraft – these include Starlink, operated by SpaceX. Since the start of the CMA’s Phase 2 review, the firm has launched a significant number of new satellites into space and secured its first contract with a European airline (airBaltic).
Established players – including Panasonic and Intelsat – are also investing and entering into new sector partnerships. For example, both companies have signed agreements with recent entrant OneWeb, which completed its global satellite constellation last month, allowing them to use OneWeb satellites to enhance their own offerings to airlines.
Richard Feasey, chair of the inquiry group carrying out the Phase 2, said:
The satellite communications sector is evolving at rapid pace – new companies are entering the market, more satellites are being launched into space, and firms are exploring and entering into new commercial deals. All the evidence has shown that the sector will continue to grow as the demand for satellite connectivity increases.
After carefully scrutinising the deal, we are now satisfied that, following the merger, these developments will ensure that both airlines and their UK customers will continue to benefit from strong competition.
For more information, visit the Viasat / Inmarsat merger inquiry page.
Notes to Editors:
- For media enquiries, contact the CMA press office on 020 3738 6460 or email@example.com.
- The Secretary of State for Business, Energy and Industrial Strategy carried out a separate investigation and made a final order pursuant to section 26 of the National Security and Investment Act 2021 to provide assurance that (i) controls are in place to protect information from unauthorised access and (ii) strategic capabilities continue to be provided by Inmarsat and Viasat to the UK government.
- Viasat owns and operates a network of geo-stationary satellites and provides satellite connectivity services for use in consumer, commercial, and government applications. Viasat also provides communications and cybersecurity products and services, and manufactures and supplies equipment and network technology for satellite connectivity services.
- Inmarsat owns and operates a network of geo-stationary satellites and provides broadband and narrowband connectivity services for government and commercial applications.
- Viasat entered into a share purchase agreement with Inmarsat’s shareholders on 8 November 2021 pursuant to which Viasat agreed to indirectly acquire 100% of Inmarsat’s issued share capital.
- All enquiries from the general public should be directed to the CMA’s General Enquiries team on firstname.lastname@example.org or 020 3738 6000.
Original article link: https://www.gov.uk/government/news/satellite-merger-approved-after-in-depth-cma-probe
Latest News from
Competition & Markets Authority
Blowing the whistle on cartels06/06/2023 15:10:00
CMA increases informant reward up to £250K to crack down on cartels.
Advice for shoppers after report highlights difficulties buying 'green' home heating31/05/2023 12:05:00
CMA will be carrying out further work looking into potential misleading practices in the green heating and insulation sector.
Meta offers to limit use of other businesses’ ad data to address CMA concerns29/05/2023 10:05:00
In response to competition concerns raised by the CMA, Meta has offered commitments not to use competitors’ advertising data for its Facebook Marketplace online classified ad service. It will do this by implementing new technical systems and training for staff.
Demolition company director disqualified for 7 years for bid rigging and compensation payments25/05/2023 16:05:00
The CMA has secured the disqualification of a further demolition company director for illegal cartel behaviour, bringing the total number to 4.
CMA provisionally finds 5 banks broke competition law on UK bonds24/05/2023 13:05:00
The CMA has provisionally found these banks unlawfully exchanged sensitive information regarding UK government bonds in one-to-one online chats.
Vet business takeovers raise competition concerns for pet owners18/05/2023 14:10:00
CMA’s initial investigation into Medivet’s purchase of multiple independent vet businesses highlights potential price and quality issues
CMA update on action to help contain cost of living pressures15/05/2023 13:20:00
The CMA today updated on the action it is taking to help contain rising cost of living pressures in road fuel and groceries.
Merger could worsen vehicle salvage service options for UK car insurers05/05/2023 16:10:00
The CMA has provisionally found that Copart’s completed purchase of Hills Motors raises competition concerns in the supply of vehicle salvage services in the UK.