SES Takes Controlling Stake in O3B

Betzdorf, Luxembourg, May 2, 2016--SES S.A. (NYSE Euronext Paris and Luxembourg Stock Exchange: SESG) has agreed to increase its interest in O3b Networks (O3b) to 50.5% and, in doing so, will take a controlling share in the company. The transaction is subject to regulatory approvals which are expected to be completed during H2 2016.

SES will pay US$ 20 million to increase its fully diluted ownership of O3b from 49.1% to 50.5%, bringing its aggregate equity investment in O3b to date to US$ 323 million (EUR 257 million). On completion, SES will consolidate O3b’s net debt, which is currently US$ 1.2 billion. The transaction is expected to generate returns exceeding SES’s hurdle rates for infrastructure investments.  

Karim Michel Sabbagh, President and CEO, commented: “The move to take control of O3b is a game-changing acquisition and a major step in the execution of SES’s differentiated strategy and complements SES’s growth strategy.

O3b delivers a unique capability and solution, which is already in operation, for Enterprise, Mobility and Government clients, particularly for applications where low latency is an increasingly essential feature. The combined GEO/MEO satellite network and capabilities give SES a truly compelling and differentiated service offering within the industry, strengthening SES’s unique positioning across the data-centric markets.

The consolidation of O3b – the fastest growing satellite network – significantly enhances SES’s long-term growth profile with the constellation expected to generate annualised revenues of between USD 32 million and USD 36 million per satellite at steady-state. Looking forward, both SES and O3b will benefit from the strong synergies and strategic fit across both businesses,”  added Sabbagh.

Milbank, Tweed, Hadley & McCloy LLP provided advisory services to SES in this transaction.

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