Eutelsat Communications approved the acquisition of privately-held Satelites Mexicanos (Satmex). The deal, valued at USD 1.14 billion, is intended for the Paris-based communication company's expansion in the Latin American satellite market. The transaction amount will be divided in two. Eutelsat said it will pay USD 831 million to Satmex and take on the latter's net debt which was pegged at USD 311 million in March. Eutelsat said that the buy will probably happen at year's end, as it is still subject to approvals from various regulatory bodies.
The purchase is also expected to increase Eutelsat's earnings per share from July 2015 as they enter the fast-growing satellite market in Latin America. Citing reports from Euroconsult, Eutelsat compared the yearly growth of Latin American satellite services to that of Western Europe. From 2011 to 2016, the yearly growth rate in demand for both regions is estimated to be less than 7%.
The three satellites of Satmex serve 90% of the Latin American population. Their revenues last year amounted to USD 111.8 million.
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