French satellite firm Eutelsat is in acquisition talks with Low Earth Orbit satellite operator OneWeb.

The GEO satellite company today confirmed media reports that it is in talks with the UK startup about a possible merger.

“Eutelsat Communications confirms that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination to create a global leader in Connectivity with complementary GEO/LEO activities,” the company said.

Eutelsat said the combined entity would be “the first multi-orbit satellite operator offering integrated GEO and LEO solutions and would be uniquely positioned” to serve the growing satellite Connectivity market.

Euronext Paris-listed is already a significant shareholder in OneWeb, having invested $550 million into the company in April 2021 and becoming OneWeb’s second-largest shareholder last December after investing a further $165 million; today Eutelsat owns around 23 percent of OneWeb.

The two companies have also previously signed a distribution deal to see the French company resell OneWeb’s LEO satellite services.

Under the terms of the transaction being discussed, Eutelsat and OneWeb shareholders would each hold 50 percent of the combined group’s shares.

Media reports over the weekend suggest the UK will retain special rights over OneWeb after the deal, including a veto over sales to clients deemed dangerous for security reasons and a veto over a change in the location of headquarters.

These special rights also entail a veto over business relations that may compromise the so-called "Five Eyes" intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States and a say in the supply chain and launch decisions.