Amazon reveals plan to acquire Globalstar for satellite expansion

Amazon has announced its intention to acquire Globalstar, a leading mobile satellite services provider, as part of its strategy to expand its Amazon Leo low Earth orbit (LEO) satellite network. This agreement, which also includes a collaboration with Apple, is designed to enhance satellite connectivity for mobile devices and close coverage gaps worldwide.

Expanding Amazon Leo with Direct-to-Device Services

Globalstar’s satellite infrastructure, spectrum licenses, and operational expertise will be integral to Amazon Leo’s ability to deliver direct-to-device (D2D) services. This next-generation satellite system will expand cellular coverage to areas beyond the reach of traditional terrestrial networks. The system, which is expected to be operational by 2028, will enable voice, messaging, and data services directly to mobile devices.

"There are billions of customers out there living, traveling, and operating in places beyond the reach of existing networks, and we started Amazon Leo to help bridge that divide", said Panos Panay, Senior Vice President of Devices & Services at Amazon. "By combining Globalstar’s proven expertise and strong foundation with Amazon’s customer-obsession and innovation, customers can expect faster, more reliable service in more places - keeping them connected to the people and things that matter most."

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Collaboration Between Amazon and Apple

As part of its satellite expansion strategy, Amazon has entered into a partnership with Apple to power satellite features for iPhone and Apple Watch models. This agreement continues the work Globalstar currently provides for Apple, including features like Emergency SOS via satellite, location sharing, and roadside assistance. These features have been critical in emergency situations, as highlighted by Greg Joswiak, Senior Vice President of Worldwide Product Marketing at Apple.

"Since launching more than three years ago, our groundbreaking safety service Emergency SOS via satellite has helped save many lives around the world", said Joswiak. He also emphasized Apple’s excitement about continuing its collaboration with Amazon Leo to ensure these satellite-based features remain accessible for users.

Strengthening Connectivity and Closing the Digital Divide

The integration of Globalstar’s resources with Amazon Leo will help deliver reliable connectivity to customers globally, including remote and underserved areas. Globalstar’s existing satellite fleet and upcoming satellites will operate alongside Amazon Leo’s planned network of thousands of LEO satellites.

Paul Jacobs, CEO of Globalstar, underscored the potential of the deal, stating, "We have long believed low Earth orbit satellite constellations offer the most effective path to truly connect users and devices anywhere and anytime." He added that the partnership with Amazon Leo will advance digital connectivity innovations to benefit customers worldwide.

This acquisition is also expected to bolster economic growth by creating high-value jobs in engineering, manufacturing, and operations. Additionally, it aims to promote innovation in satellite communications while fostering competition within the sector.

Key Transaction Details

Under the agreement, Globalstar stockholders have the option to receive $90.00 in cash per share or an equivalent value in Amazon common stock, subject to certain limitations on the total cash allocation. The transaction is expected to close in 2027, pending regulatory approvals and Globalstar meeting specific operational milestones. Approximately 58% of Globalstar’s stockholders have already approved the deal.

Amazon’s investment in this acquisition highlights its commitment to addressing the global digital divide and providing innovative satellite solutions for consumer, enterprise, and government customers.

Looking Ahead

With the integration of Amazon Leo’s advanced satellite technology and Globalstar’s robust infrastructure, Amazon is poised to transform global connectivity. By delivering faster, more reliable D2D services and collaborating with partners like Apple, Amazon aims to bring connectivity to even the most remote corners of the planet.

As Panos Panay remarked, this initiative is about "extending coverage to every corner of the planet" and ensuring that customers stay connected, no matter where they are. With the expected completion of the merger in 2027, the expanded Amazon Leo network promises to redefine satellite communications and connectivity for years to come.

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