The £5.4 billion takeover of UK satellite giant Inmarsat by US firm Viasat is to be investigated over competition concerns, the industry watchdog has announced.
Concerns over the impact of foreign takeovers in the industry ratcheted even higher on Monday morning as a French satellite company separately confirmed it is in merger talks with UK firm OneWeb, which is part-owned by the UK Government.
In November last year, Viasat agreed the takeover of Inmarsat in what it described as a “transformative” deal for the global communications industry.
The deal came under immediate scrutiny due to the satellite operator’s role in the UK’s economy and national security.
Last month, shareholders approved the deal to buy Inmarsat from private equity firm Apax, which had only taken it private in a £2.6 billion takeover two years earlier.
However, on Monday, the Competition and Markets Authority (CMA) said it will now investigate whether the new deal “may be expected to result in a substantial lessening of competition”.
Last month, Mr Musk’s SpaceX reportedly called on US regulators to withhold approval of the takeover by Viasat.
An Inmarsat spokesman said: “Inmarsat is continuing to co-operate with the regulatory review process into its proposed combination with Viasat.
“The regulatory process is on track, and we will contribute constructively to the review by the UK CMA, as we have with regulators in other territories.
“Regulatory approval for the transaction has been secured in several key markets, including recently from the important Committee on Foreign Investment in the United States.”
Separately on Monday, French firm Eutelsat said it is in talks with UK rival OneWeb over a 50-50 merger.
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The British Government owns nearly 20% of OneWeb, which provides broadband coverage from space, while the French and Chinese governments each own stakes in Eutelsat.
Eutelsat already owns around 23% of OneWeb and saw shares jump after merger talks were first reported.
