Inmarsat buyer Bidco vows to stay local amid regulatory scrutiny
Updated July 23 at 1:22 p.m. Eastern with additional information from the U.K. government.
WASHINGTON — The consortium buying British satellite operator Inmarsat has pledged to keep core functions of the satellite operator in the United Kingdom as regulatory oversight of the $3.3 billion purchase increases.
The Connect Bidco consortium told the British government that for at least three years it would keep Inmarsat’s core network operations center and skilled engineering resources in the country once the merger, expected to close late this year, is complete.
The U.K. government, in a document released July 18 by the Department for Digital, Culture, Media & Sport, said that it accepted the consortium’s offer to voluntarily make “legally-binding undertakings” about Inmarsat’s location.
News of that commitment came two days after the U.K.’s Competition and Markets Authority announced it was reviewing the Inmarsat buyout on antitrust grounds. The review, prompted by a voluntary notice from Bidco, could lead the agency to modify or block the merger, though that outcome is not expected.
“It has a vanishingly small chance of delaying this buyout, not least because there is no competition issue created by the action,” Gregory Francis, managing director at the regulatory consulting firm Access Partnership, said by email. “Competition in the markets Inmarsat serves is healthy and getting healthier.”
Bidco and Inmarsat declined to comment on the merger review.
The U.K’s Department of Digital, Culture, Media and Sport said July 22 that the Competition and Markets Authority has been given until Sept. 17 to prepare a report on the competition and national security aspects of the deal.
Bidco is comprised of two Canadian pension funds, New York-based Warburg Pincus and Apax Partners in London. The consortium had stated in March its intent to keep Inmarsat headquartered in the U.K., but firmed up those intentions more recently to the British government.
Bidco said July 18 that the commitment to keep Inmarsat in the U.K. was “separate from and without prejudice to” the merger review.