PARIS - Eutelsat and Abertis have finally reached an agreement on the sale of the French satellite operator's stake in Hispasat. Abertis and Eutelsat were the two largest investors in Hispasat. With a sale agreed upon, it is now up to the Spanish government to approve the deal.
Under the deal, Abertis will pay EUR302 million ($338 million) for Eutelsat's 33.69 percent stake in Hispasat. The sale process was initiated by Eutelsat in July 2016 when it exercised a put option granted by Abertis in 2008. The deal values Hispasat, which generated EUR225.5 million ($249.6 million) in revenues at EUR175.7 million ($194.5 million) EBITDA in 2016, at roughly $1 billion, or 5.2 times 2016 EBITDA.
The agreement makes sense for all three parties. Eutelsat's ownership of Hispasat had become awkward as the two companies are increasingly competing with each other in the satellite market. Competitive intensity increased following Eutelsat's acquisition of Satmex in 2014, which gave it a major stake over the Americas where Hispasat generates the majority of its revenue. Eutelsat is now free to compete as it sees best.
The deal also enables Abertis to proceed with its own strategy. On May 15, Italy's Atlantia SpA made a EUR16.3 billion ($18 billion) offer to buy Abertis. Both companies are major operators of toll roads and other infrastructure, so the deal would allow Atlantia to diversify away from the Italian market and increase operational efficiency.
However, the deal caught the eye of the Spanish government, which views Hispasat as a strategically important company. If the deal between Abertis and Atlantia goes through, more than 90 precent of Hisapsat would be owned by a company outside of Spain.
The deal with Eutelsat complete, Abertis now controls over 90 percent of Hispasat, freeing it to divest or sell the company before a deal with Atlantia goes through. That will please the Spanish government and increase the chances of approval.
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