Satellite operator Yahsat and analytics provider Bayanat have agreed to an all-share merger.

In a joint announcement earlier this week, the two companies said that the combined entity will be worth 15 billion dirhams ($4.1 billion), with the new entity named Space42.

Satellite connectivity
– Getty Images

The proposed deal would make Bayanat the legal entity, with its shareholders owning around 54 percent of the merged business, with Abu Dhabi-based Yahsat shareholders holding the rest.

Bayanat chairman H.E. Tareq Al Hosani, said the "merger will unite two leading home-grown companies to create the MENA region’s first AI-powered space technology company."

"Leveraging our complementary assets, capabilities, and ambitions will allow us to expand across the space value chain and offer an unparalleled service to our combined customer base," he added.

"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.”

Group 42 (G42), Mubadala Investment Company (Mubadala), and International Holding Company (IHC) will own approximately 42 percent, 29 percent, and eight percent of the combined entity respectively.

"The merger is a compelling opportunity to amplify value creation for shareholders, utilizing 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," added Musabbeh Al Kaabi, chairman of Yahsat.

The merger is subject to regulatory approval from government authorities but is expected to go ahead in the second half of next year.

Both companies will continue to operate independently until the merger is effective.