Abu Dhabi-listed companies Bayanat and Al Yah Satellite Communications Company (Yahsat) on Tuesday announced to merge the companies, creating an AI-powered space technology giant with a market capitalisation of more than Dh15 billion.
The market cap is based on both entities’ closing share prices as of December 18, 2023, and a free float of 21 per cent.
The merged entity would be one of the most valuable publicly listed space companies in the world by market capitalisation, with additional potential for significant global growth and synergies.
The combined entity aims to capture regional and international opportunities in geospatial and mobility solutions, satellite communications and business intelligence.
“This merger will unite two leading home-grown companies to create the Mena’s region’s first AI-powered space technology company. Together, we will leverage our key synergies to reinforce our position as a key engine of growth and strategic solutions provider to the UAE government and its agencies, while expanding our reach to global customers,” said Tareq Al Hosani, chairman of Bayanat.
“The merger is a compelling opportunity to amplify value creation for shareholders, utilising synergies and strategic consolidation to create a technologically advanced champion, further reinforcing the UAE’s position as a leader in the AI and space sectors. The enlarged entity will benefit from accelerated growth potential as a player of scale with enhanced competitive advantage. This growth will be driven by our access to high-growth markets via cutting-edge technologies and an increased base of local and global customers, in addition to strong financials that allow us to pursue more ambitious growth opportunities,” said Musabbeh Al Kaabi, chairman of Yahsat.
The proposed transaction will be executed through a share swap with Bayanat as the remaining legal entity. Bayanat shareholders will own approximately 54 per cent and Yahsat shareholders approximately 46 per cent of the combined entity.
Group 42 (G42), Mubadala Investment Company (Mubadala) and International Holding Company (IHC) will own approximately 42 per cent, 29 per cent and 8 per cent of the combined entity respectively.
Both companies obtained independent fairness opinions from Houlihan Lokey and FTI Capital Advisors.
Bayanat and Yahsat will continue to operate independently until the merger is effective, which is expected to take place in the second half of 2024.
The merger is subject to regulatory approvals from governmental authorities including the Securities and Commodities Authority and the ADGM Registration Authority and the approval of shareholders.