Bayanat AI PLC (Bayanat), a Abu-Dhabi-based artificial intelligence (AI)-powered geospatial solutions provider, and Al Yah Satellite Communications Company P.J.S.C. (Yahsat), a global satellite operator, have agreed a potential AED 15 billion (over $4 billion) merger.

Bayanat said in a statement on Tuesday that the two companies respective boards of directors have unanimously voted to recommend to shareholders a merger of the two Abu Dhabi-headquartered and ADX-listed entities.

The proposed merger will create an AI-powered space technology champion in the Middle East and North Africa (MENA) region with an implied market capitalization of over AED 15 billion (over USD 4 billion), based on both entities’ closing share prices as at 18 December 2023, the last day of trading prior to announcement of the merger.

This would make it one of the most valuable publicly listed space companies in the world by market capitalization, with additional potential for significant global growth and synergies.

According to the statement, the combined entity will be vertically integrated and optimally positioned to capture regional and international opportunities in geospatial and mobility solutions, satellite communications and business intelligence.

With a strengthened financial position, enhanced AI-powered technological capabilities and a diversified product portfolio, the combination will also establish a platform for transformative technologies to enable space-based services with significant impact on societies and economies.

It is moreover expected to benefit from considerable revenue synergies and economies of scale that will best position the organization for innovation and profitable growth.

The proposed transaction will be executed through a share swap with Bayanat as the remaining legal entity.

Bayanat shareholders will own approximately 54 percent and Yahsat shareholders approximately 46 percent of the combined entity.

Bayanat and Yahsat have each, in line with international best practice, obtained independent fairness opinions from Houlihan Lokey and FTI Capital Advisors (respectively). Group 42 (G42), Mubadala Investment Company (Mubadala) and International Holding Company (IHC) will own approximately 42 percent, 29 percent and 8 percent of the combined entity respectively.

H.E. Tareq Al Hosani, Chairman of Bayanat, said that this 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,

“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,” he added.

Musabbeh Al Kaabi, Chairman of Yahsat, said 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 United Arab Emirates (UAE)’s position as a leader in the AI and space sectors.

According to him, the enlarged entity will benefit from accelerated growth potential as a player of scale with enhanced competitive advantage.

He said 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.

“We look forward to working together for the realisation of our shared ambition,” he added.

According to the statement, the merger is subject to a number of conditions, including regulatory approvals from governmental authorities including the Securities and Commodities Authority and the ADGM Registration Authority and the approval of shareholders representing 75 percent of the voting rights present and voting at a quorate general assembly meeting of each of Bayanat and Yahsat.

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.

Bayanat, an ADX-listed public company with majority shareholding by G42, provides AI-powered geospatial solutions to a growing number of sectors such as government services, environment, energy and resources, smart cities and transportation.

Its offering includes topographic, hydrographic and aeronautical products and charts, as well as spatial data surveying, analysis, management, modeling, visualization and cartography services.

Bayanat’s solutions harness vast amounts of premium and unique data from a range of sources including various types of satellites such as Synthetic Aperture Radar (SAR) satellite, Optic Satellite, as well as High Altitude Pseudo Satellites (HAPS) and conventional mapping and surveying powered by AI to drive geospatial intelligence (gIQ).

Yahsat is a public company listed on the Abu Dhabi Securities Exchange (ADX) and a subsidiary of Mubadala Investment Company PJSC, offering multi-mission satellite solutions in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia.

Yahsat’s fleet of five satellites reaches more than 80 percent of the world’s population, enabling critical communications including broadband, broadcasting, backhauling and mobility solutions.

Based out of Abu Dhabi in the UAE, Yahsat provides C, Ku, Ka and L-band satellite communications solutions for land, maritime and aero platforms to consumers, governments and enterprises.

Its businesses consist of Yahsat Government Solutions, Thuraya, YahClick (powered by Hughes) and YahLink.

Yahsat also participates in Hughes do Brasil, an equity partnership with Hughes, and Yahlive, an equity partnership with SES.

In 2020, Yahsat commenced construction of Thuraya 4-NGS, the next generation telecommunications system for Thuraya, which is due to enter service in 2025.

In 2023, Yahsat commenced construction of two new software-defined telecommunication satellites, Al Yah 4 and Al Yah 5, which are expected to be launched in 2027 and 2028, respectively.

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