Amazon has acquired a satellite communications company to target the satellite internet market led by Elon Musk’s SpaceX. Both companies announced that Amazon is acquiring Globalstar to expand its low-orbit satellite network, ‘Amazon Leo’.
Through this acquisition, Amazon will add 24 of Globalstar’s satellites to its existing network of approximately 200 satellites. Furthermore, starting in 2028, Amazon will be able to launch a next-generation Direct-to-Device (D2D) service that connects satellites directly to mobile devices, such as smartphones, without going through ground base stations.
Amazon also signed an additional agreement to continue supporting Apple’s satellite-based emergency messaging service, which was previously provided by Globalstar.
Panos Panay, Senior Vice President (SVP) of Amazon Devices & Services, emphasized, “Billions of people live, travel, and work in areas not covered by existing networks. We launched Amazon Leo to bridge this gap,” adding, “Through Globalstar’s proven expertise and solid foundation, customers will be able to experience faster and more reliable services in more regions.”
Globalstar shareholders will receive $90 in cash or Amazon stock of equivalent value for each share they hold. Considering that Globalstar has a total of 128.59 million issued shares, the total acquisition amount reaches $11.57 billion. This represents a 117% premium over the market capitalization at the end of last October, before rumours of an Amazon acquisition began circulating. The acquisition has received written consent from 58% of Global Star shareholders and is expected to be finalized next year following regulatory approval.
Amazon’s acquisition of Globalstar is aimed at catching up with SpaceX, a leader in the satellite communications sector. While SpaceX currently possesses a satellite network of 10,000, Amazon’s fleet currently numbers only around 200. Amazon had initially applied for and received approval to launch 1,600 new satellites by July of this year but has been facing difficulties in building its own satellite network, including recently requesting a grace period from the U.S. Federal Communications Commission (FCC).