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UK government to approve takeover of satellite company Inmarsat

By Lawrence Gash

National security assurances quell doubts over private equity deal

The $3.4 billion (£2.7 billion) takeover of UK satellite company Inmarsat (ISAT) by Connect Bidco, a consortium of private equity investors and pension funds, is set to be approved by the British government, the Times reports.

The UK digital and culture secretary Nicky Morgan said that undertakings offered by the two companies on the national security risks were adequate and appropriate. She added that the Competition and Markets Authority (CMA) had found no competition issues with the deal.

The satellite telecommunications company, founded in 1979, offers global mobile services to governments, shipping, mining and airline businesses as well as aid agencies. Its market capitalisation is currently $2.704bn.

The British government halted the deal in July, to examine potential implication for national security.To ensure takeover went ahead, Inmarsat promised to maintain existing security measures and to introduce further controls to protect sensitive information. One of the UK government’s main requirements was for Inmarsat to maintain a UK-registered company to ensure services and jobs remain under its jurisdiction.

Connect Bidco is a consortium formed of Warburg Pincus, Apax Partners and a number of Canadian pension plans.

Inmarsat shares currently stand at £582.80 up from last week’s low of £574.60. That figure is high above its 52-week low of £355.00 and could rise over the year-long high of £617.20.

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