Two prominent Abu Dhabi-based companies, Bayanat and Yahsat, have officially announced their decision to merge, creating one of the world’s most valuable space companies. This transformative deal will establish the MENA region’s inaugural artificial intelligence (AI)-powered space technology company, holding a market capitalization of AED15 billion ($4.08 billion).
Bayanat and Yahsat’s evolution
Bayanat, predominantly owned by G42, traces its roots to the commercialization of the UAE’s Military Survey Department, a pivotal sector within the Armed Forces. It specializes in national-level mapping and geospatial products. Hence, it has been a crucial contributor to both the public and private sectors in the UAE.
Meanwhile, Yahsat, a subsidiary of Mubadala Investment Company, has become a key player in the satellite services industry. It operates in over 150 countries across Europe, the Middle East, Africa, South America, Asia, and the Australasia region. Thus, Yahsat has established itself as a leading force in the global space industry.
The merger mechanics
The proposed merger will be executed through a share swap mechanism, with Bayanat retaining its legal entity status. Moreover, shareholders of Bayanat and Yahsat will own 54 percent and 46 percent, respectively, of the merged entity. This strategic move aims to leverage synergies and reinforce their role as a growth engine. Moreover, they take the lead in strategic solutions for the UAE government and global clients.
The merger, slated for the second half of 2024, is dependent on fulfilling various conditions. This includes regulatory approvals from governmental authorities such as the Securities and Commodities Authority and the Abu Dhabi Global Market Registration Authority. Until the merger is effective, both Bayanat and Yahsat will continue to operate independently.
The global space economy witnessed an 8 percent growth to $546 billion in 2022. Besides, projections indicating a further 41 percent expansion over the next five years, according to the Space Foundation. Therefore, Bayanat and Yahsat’s merger aligns with the trend of increasing private players entering the space industry.
As the Arab world’s second-largest economy, the UAE boasts the largest space sector in the region in terms of investment size and diversity. A testament to its commitment, the UAE launched a AED3 billion ($820 million) fund last year to support its space program. Moreover, it initiated a new project for the development of radar satellites.
Yahsat’s financial performance is evident by its third-quarter profit of $26.4 million and an 8 percent annual revenue growth to $117.4 million. This underscores the success of its mobility solutions business and increased finance income. The merger is positioned as a compelling opportunity to amplify value creation, utilizing synergies and strategic consolidation to emerge as a technologically advanced industry champion.
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