Update: SES announced in a brief June 22 news release that discussions about a possible combination with Intelsat have ceased.

WASHINGTON — Intelsat has ended talks about merging with rival satellite operator SES, a source close to the discussions confirmed.

They had been negotiating a deal for at least three months that would have formed a group with around $4 billion in revenues, beefing up defenses as SpaceX’s Starlink broadband constellation expands into their satellite broadband markets.

A transaction would have followed Viasat’s recently completed Inmarsat merger and another consolidation deal in the works between Eutelsat and OneWeb.

However, SES and Intelsat were ultimately unable to see eye to eye about their potential combination. The operators are also at odds over the distribution of billions of dollars of C-band spectrum clearing proceeds.

The source said Intelsat notified SES about its decision June 21.

“Given the content of recent discussions — and the fact that the SES-aligned parties would not agree to certain business fundamentals important to Intelsat stakeholders — Intelsat concluded that a combination in fact would not create sufficient value compared to Intelsat going in a different strategic direction,” the person told SpaceNews.

Bloomberg first broke the news about Intelsat’s withdrawal from the merger discussions in a June 21 report that cited sources.

Publicly listed SES could not be reached for comment outside the company’s regular business hours in Luxembourg.

“Intelsat engages in strategic conversations with potential partners on a regular basis, and we do not publicly comment on the content or outcome of those discussions,” said Clay McConnell, Intelsat senior vice president of corporate communications and marketing.

McConnell added that Intelsat feels it is “well positioned as a market and strategy leader in the satellite communications industry” following its emergence from Chapter 11 bankruptcy protection in February 2022.

Analysts have speculated that a difference of opinion around the merger talks could have contributed to the recent surprise and sudden resignation of SES CEO Steve Collar, who is leaving the company at the end of June — just a few weeks after announcing his departure.

A combination would have likely faced significant regulatory scrutiny.

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...