Amazon Acquires Globalstar for $11.6 Billion, Intensifying Satellite Communications Rivalry with Musk

Targeting the D2D Satellite Communications Market

Amazon has acquired satellite communications company Globalstar for $11.6 billion (approximately 17.0694 trillion won). This acquisition sets the stage for a fierce battle for dominance in the satellite communications market, as Amazon goes head-to-head with SpaceX, led by Elon Musk, CEO of Tesla. Amazon's founder, Jeff Bezos, also owns the space company Blue Origin.

On the 14th (local time), Amazon announced that it would acquire Globalstar to expand its low Earth orbit satellite network, Amazon LEO. Through this acquisition, Amazon will add 24 of Globalstar's satellites to its existing network of around 200 satellites. Beginning in 2028, Amazon will also be able to launch next-generation D2D (direct-to-device) services, which connect satellites directly to smartphones and other mobile devices without passing through ground stations.

Rocket carrying Amazon's satellite. Photo by Reuters/Yonhap News Agency

This acquisition was carried out after obtaining written consent from 58% of Globalstar shareholders. As a result of the deal, Globalstar shareholders will receive either $90 in cash per share or Amazon stock of equivalent value. The acquisition is expected to be finalized next year, pending regulatory approval.

Globalstar has a total of 128.59 million outstanding shares, bringing the total acquisition price to $11.57 billion. Compared to Globalstar's market capitalization at the end of October last year, before rumors of Amazon’s acquisition emerged, this represents a 117% premium.

With Amazon acquiring Globalstar, competition is expected to intensify with SpaceX, led by CEO Musk, which is currently the industry leader. SpaceX operates a satellite network of about 10,000 satellites and serves around 10 million customers. In comparison, Amazon's satellite network consists of only about 200 satellites. The acquisition of Globalstar is expected to partly close this gap. Amazon has also secured Apple as a partner, agreeing to continue supporting Apple’s satellite-based emergency messaging service, which Globalstar has provided, through Amazon LEO.

Panos Panay, Senior Vice President (SVP) of Amazon Devices & Services, said, "Billions of people live, travel, and work in areas not covered by existing communications networks. Amazon launched Amazon LEO to bridge this gap," adding, "With Globalstar's proven expertise and solid foundation, customers will be able to experience faster and more reliable services in more regions."

This content was produced with the assistance of AI translation services.