(Bloomberg) — Amazon has agreed to acquire satellite operator Globalstar in a roughly $11.6 billion deal that would boost the tech giant’s efforts to build its own satellite operation.
Amazon is offering Globalstar shareholders $90 in cash per share, or 0.32 shares of Amazon stock capped at $90 per share, according to a statement on Tuesday. This represents a 23.5% premium over Globalstar’s closing price on Monday. The deal is expected to close in 2027.
With the acquisition, “customers can expect faster, more reliable service in more places — keeping them connected to the people and things that matter most,” Panos Panay, Amazon’s senior vice president of devices and services, said in the statement.
Continues after advertising
Bloomberg News previously reported that Amazon was in advanced talks to buy Globalstar. Shares of the satellite company jumped about 9% in pre-market trading following the formal announcement, after initially being halted. Shares have risen more than 75% since Oct. 29, the last day of trading before Bloomberg reported the company was exploring a potential sale. Amazon shares rose 1.2% before markets opened in New York.
Amazon is building its low-Earth orbit satellite network, Amazon Leo, in a bid to compete with Elon Musk’s SpaceX, whose fast-growing Starlink unit has more than 10 million active customers and about 10,000 satellites in orbit. Starlink is estimated to generate more than $9 billion in revenue this year.
Satellite broadband is expanding, especially in hard-to-reach places, but Amazon is falling behind on its goal of increasing its coverage with more than 7,700 satellites. The company asked the Federal Communications Commission (FCC) to waive or extend the deadline to have 1,600 satellites in the air by July.
Globalstar can accelerate Amazon’s efforts because it already operates a functional satellite network, said Bloomberg Intelligence analyst John Davies. But the company’s network is smaller than Starlink’s and focuses mainly on connecting phones and other devices in low-coverage areas. The company serves, for example, Apple Inc.’s emergency services feature on iPhones.
