Amazon to spend $11bn on satellite firm in growing Starlink rivalry

Amazon wants to get thousands more satellites into orbit to offer internet and mobile services.

Amazon is moving in on the orbital mobile connectivity market that’s currently dominated by Elon Musk’s Starlink. The company on Tuesday said it had agreed to buy satellite company Globalstar, known for powering Apple’s “Emergency SOS” feature, for $11.57 billion in cash. The $90-per-share deal will net Amazon all of Globalstar’s satellite operations, infrastructure, and mobile satellite services spectrum licenses, enabling the larger company to flesh out its young satellite business, Amazon Leo, with direct-to-device services ahead of its launch later this year. The announcement comes just days after Amazon CEO Andy Jassy touted Amazon Leo’s roster of customers, which includes Delta Airlines, AT&T, Vodafone, Australia’s National Broadband Network, and NASA. The company on Monday also showed off a new satellite internet antenna meant for commercial jets that promises high-speed internet during flights.

Amazon.com Inc. agreed to acquire satellite operator Globalstar Inc. in a roughly $11.6-billion deal that would expand the services of its satellite system. Amazon is offering Globalstar shareholders either $90 in cash per share, or 0.32 shares of Amazon stock with a value capped at $90 a share, according to a statement on Tuesday. Satellite broadband is booming, especially in hard-to-reach locations, but Amazon has been hamstrung by delays from rocket builders and other issues as it worked to launch its own offering. Amazon Leo’s roughly 200 satellites in orbit are running limited commercial tests, and the company has a goal of eventually operating more than 7,700 satellites. Earlier this year, Amazon asked the Federal Communications Commission to waive or extend a deadline to have 1,600 satellites aloft by July. With the acquisition, “customers can expect faster, more reliable service in more places — keeping them connected to the people and things that matter most,” said Panos Panay, senior vice president of devices and services at Amazon, in the statement. Until now, the two leading players in the D2D market have been SpaceX and Midland, Texas-based AST. Musk’s company has joined with T-Mobile U.S. Inc. to provide connectivity via Starlink satellites to areas without traditional land-based cell service. AST has partnerships with operators such as AT&T Inc. and Verizon Communications Inc. but is still at the early stage of launching its satellite network.

Amazon.com said on Tuesday it would acquire Globalstar in an $11.57 billion deal, bolstering its fledgling satellite business as it looks to take on Elon Musk-led bigger rival Starlink. Shares of satellite company Globalstar were up more than 9% in premarket trading, after gaining over 6% in the past two weeks following media reports of the companies’ discussions. The stock had nearly doubled in value last year and has risen about 12% so far this year, before news of an acquisition emerged. Under the deal, Globalstar shareholders can elect to receive either $90 in cash or 0.3210 shares of Amazon common stock for each share of the satellite company they own, the companies said.

Amazon said on Tuesday it would acquire a satellite company in an $11.57bn deal, bolstering its own fledgling space business as it looks to take on Elon Musk-led bigger rival Starlink. The deal gives Amazon access to Globalstar’s network of two dozen satellites, boosting the tech giant’s ambitions to challenge SpaceX unit Starlink, which currently has about 10,000 units in orbit.