The expected wave of consolidation in the fragmented Asian fixed satellite services sector has seemingly been on the agenda since I first became editor of this magazine but has never really materialised. Governments have continued to keep a firm grip on…
The expected wave of consolidation in the fragmented Asian fixed satellite services sector has seemingly been on the agenda since I first became editor of this magazine but has never really materialised. Governments have continued to keep a firm grip on their national champions while some of the more aggressive start ups have fallen by the wayside.
Throughout this time, numerous western operators and investors have sought to tap the burgeoning Asian market, and in particular China, as capacity demand across the region continues to soar. Cross-border deals though have been few and far between. However, there are now signs that a flurry of M&A activity could be on the way.
SatelliteFinance has learnt that Asia Broadcast Satellite is currently on the block and a host of New York-based private equity firms have been taking a look at the books.
The company’s majority shareholder Citi Venture Capital International is eyeing an exit and has hired Citigroup to run the sale. Only sponsors are thought to have been approached so far but it is understood that some strategic players are aware of the process and could make a move.
While ABS is a target for Western players, one US giant is believed to be mulling a potential Asian exit. General Electric has allegedly been testing the water over interest in its Asian satellite assets and in particular its significant stake in AsiaSat.
The utilities giant also owns GE-Satellite following the ?1.2bn split-off transaction that SES undertook in early 2007 whereby GE swapped its 19.5% holding in SES for ?588m in cash, the AMC 23 satellite, Satlynx and minority stakes in AsiaSat, Star One and Orbcomm. While the company is still subject to a lock up period on GE-Satellite, it is thought to have carried out some pre-marketing to see how much interest is out there.
Meanwhile, Ananda Krishnan edges closer to a full takeover of Malaysian satellite operator Measat with the offer document being sent to both the board and remaining shareholders on August 18. The reclusive billionaire is rumoured to be seeking to turn Measat into a global competitor and once his buy out is complete could be set to undertake an aggressive expansion policy.
All at sea
However, it is not just the Asia satellite sector where deal flow is set to pick up. The consolidation of the maritime satellite communication sector is also expected to accelerate towards the end of the year.
Following Harris Corp.’s US$525m of CapRock in May, oilfield services giant Schlumberger put its Global Connectivity Services (GCS) business on the block. The sales process has been taking place over the summer with a winning bidder expected to be announced imminently.
A number of deals are on the agenda on a smaller scale the most recent of which saw Telemar snap up Norwegian satcoms equipment developer Polaris Electronics Norge.
The dynamics of the market are also set to change considerably following Inmarsat’s announcement that it has ordered three Ka-band satellites from Boeing. The new service, dubbed Global Xpress, is expected to cost US$1.2bn and like many of its peers, Inmarsat is looking to ECA support to help fund the project.
Given the booming demand for data capacity at sea, the MSS operator has identified the maritime market as one of the key areas that it can tap with its new KA-band system. Which players will still be there by the time the new satellites launch in 2014 remains to be seen.
