Amazon Signs $11.57 Billion Deal for Satellite Firm Globalstar
Amazon announced that it plans to purchase Globalstar for $11.57 billion, strengthening its emerging satellite operations as it aims to compete with the larger Starlink, led by Elon Musk.
Shares of satellite firm Globalstar rose by more than 9 percent in premarket trading, after climbing over 6percent in the last two weeks due to media reports on the companies' talks. The stock almost doubled in value last year and has increased by approximately 12percent this year, prior to the announcement of an acquisition. Amazon stock increased approximately 1percent .
The agreement allows Amazon to utilize Globalstar's network of twenty-four satellites, enhancing the tech giant's goal to compete with SpaceX's Starlink, which presently operates around 10,000 satellites in orbit.
According to the agreement, shareholders of the satellite company can choose to receive either $90 in cash or 0.3210 shares of Amazon common stock for every share of Globalstar they possess, as stated by the companies.
Amazon is striving to expand its network by launching approximately 3,200 satellites into low Earth orbit by 2029, with around half needed by a regulatory deadline in July 2026.
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The company is presently running a network of over 200 satellites and is set to launch its satellite internet services later this year.
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Conversely, Elon Musk's Starlink - the leading satellite internet service provider - currently caters to over nine million customers worldwide.
Globalstar, located in Covington, Louisiana, known for providing the service that enables Apple's "Emergency SOS" function, manages roughly twenty satellites in low-Earth orbit. Toward the end of last year, it announced that a new network supported by Apple in development would increase that total to 54 satellites, which would include a few backups.
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Globalstar provides voice, data, and asset-monitoring services to clients in the enterprise, government, and consumer sectors. Concurrently, Amazon and Apple - which has invested approximately $1.5 billion in Globalstar - have entered into an agreement to maintain satellite-based safety functionalities like Emergency SOS and Find My for users of iPhone and Apple Watch.