OneWeb has previously raised $1.2bn from SoftBank and other investors.
Japanese telecommunications company SoftBank plans to merge satellite companies OneWeb and Intelsat, with the merger backed with $1.7bn worth of investment.
Intelsat and OneWeb have entered into a conditional merger agreement through a share-for-share deal.
The Japanese company will acquire about 40% voting stake in the merged company which will help in cutting Intelsat’s debt by $3.6bn.
Previously, OneWeb had raised $1.2bn from Softbank and other investors.
The parties are still able to terminate the agreement, while Softbank can walk out from the investment if debt exchange offers are not met within 90 days from the date of the agreement. The transaction is also subject to regulatory approvals.
The investment is expected to financially strengthen the merged company as well as support it to pursue new growth opportunities in the field of broadband connectivity.
The deal will help the new company to offer affordable and global networking solutions by leveraging Intelsat’s geostationary orbit (GEO) satellites and OneWeb’s low earth orbit (LEO) satellites.
According to Softbank, the merger between Intelsat and OneWeb has the potential to support the development of new applications such as consumer broadband, connected cars, cellular backhaul, internet of things (IoT) and machine to machine communications.
Apart from providing a new set of services, the merged entity can offer advanced solution to enterprise networks, telecommunications infrastructure to wireless operators and broadband services to aeronautical and maritime sectors.
SoftBank chairman and CEO Masayoshi Son said: “We are in the midst of a technological revolution and, provided we receive the necessary cooperation from Intelsat bondholders, we welcome the opportunity to support OneWeb as it creates the foundation for next-generation global internet services anywhere on the planet.
“This combination is consistent with SoftBank’s strategy of investing in disruptive, foundational technologies that are building the infrastructure for tomorrow, and this proposal offers a win-win opportunity to accelerate OneWeb’s mission while enhancing the Intelsat balance sheet.”
Intelsat CEO Stephen Spengler said: “We believe that combining Intelsat with OneWeb will create an industry leader unique in its ability to provide affordable broadband anywhere in the world.
“As an early equity investor in OneWeb, we recognised a network that was a complement to our next-generation Intelsat EpicNG fleet and a fit with our long-term strategy.
“By merging OneWeb’s LEO satellite constellation and innovative technology with our global scale, terrestrial infrastructure and GEO satellite network, we will create advanced solutions that address the need for ubiquitous broadband.
“The transaction, including SoftBank’s investment, will significantly strengthen Intelsat’s capital structure and accelerate our ability to unlock new applications, such as connected vehicles, as well as advanced services for our existing customers in the enterprise, wireless infrastructure, mobility, media and government sectors, while also reducing execution and other risks.”