LONDON — Societe Europeene des Satellites, the parent of Europe’s Astra satellite system, is close to buying General Electric’s satellite operations in a $5 billion deal.
SES, which carries satcaster BSkyB and Britain’s ITV network’s digital channels, has long been seeking a foothold in the U.S.
An agreement in principle with GE is believed to be in place, likely entailing $2.7 billion in cash and the remainder in stock. That would give GE a 25% stake in an expanded SES.
SES is a market leader in Europe and also has holdings in Latin America and Asia. Company was set up in the mid-’80s when satellite broadcasting first took hold in Europe.
Company is keen to roll out Internet services in the U.S. In Europe, SES already has 22 million Internet customers.
If the deal goes through, SES would boast an established platform in the U.S. from which to compete for the growing Internet access and data transmission segments of the business.
U.S. IPO likely
SES would also likely list the merged company in the U.S. through a public offering, giving the company even greater visibility.
For its part, GE would likely retain a 25% stake in the merged entity but no management control.
GE is known to have been negotiating with two other suitors, Colorado-based Echostar Communications and global satellite conglom Intelsat, but the talks with SES have apparently made substantial progress.
One potential snag is the economic slowdown in the U.S., which could lengthen the time frame for the introduction of broadband services.