EC Clears Viasat's Acquisition of Inmarsat

The European Commission has approved unconditionally the proposed acquisition of Inmarsat by Viasat. The EC concluded that the merger would not raise competition concerns in the European Economic Area (‘EEA') or any substantial part of it.

The decision follows an in-depth investigation of the proposed acquisition. Both companies are providers of ‘two-way' satellite-based communication services. Viasat owns and operates four geostationary earth orbit (‘GEO') satellites and Inmarsat owns and operates fifteen GEO satellites. Both companies use capacity from their own satellites to provide services in the nascent market for the supply of broadband in-flight connectivity (‘IFC') services to commercial airlines in the EEA and globally. They provide satellite services to customers across a range of other industry segments, including in the maritime, energy, government, and business aviation sectors, where overlaps are limited.

In the context of its in-depth investigation, the EC assessed whether the transaction might reduce competition in the market for the supply of broadband IFC services to commercial airlines in the EEA and/or globally. It also assessed if new operators of non-GEO satellites have entered or are planning to enter the IFC market and are likely to exert sufficient competitive pressure on the merged entity soon. During the investigation, the EC gathered information from a large number of commercial airline customers, and Viasat's and Inmarsat's main competitors on the relevant market.

The EC found that the parties' market position would remain moderate. Several sizable competitors would likely exert sufficient competitive pressure on the merged entity. As the market for the supply of IFC services to commercial airlines is nascent and growing, with significant excess broadband satellite capacity upstream, it provides significant opportunities for both current competitors and potential new entrants. Furthermore, the fungible nature of satellite capacity across end-uses and downstream industry segments makes an entry or new partnerships likely. The EC, therefore, concluded that the transaction would raise no competition concerns in the EEA or any substantial part of it and cleared the case unconditionally.