Amazon announced on Tuesday (April 14) its acquisition of satellite firm Globalstar in an $11.57 billion deal, marking a significant push into satellite internet services. According to reports from CNBC TV18, the deal gives Amazon access to Globalstar's network of two dozen satellites, substantially boosting the tech giant's ambitions to challenge SpaceX unit Starlink, which currently operates about 10,000 units in orbit. The acquisition provides Amazon with access to Globalstar's extensive network of more than 200 satellites, significantly expanding its satellite internet capabilities.
Under the acquisition structure, Globalstar shareholders can elect to receive either $90 in cash or 0.3210 shares of Amazon common stock for each share owned. As reported by CNBC TV18, Globalstar shares surged more than 9% in premarket trading following the announcement, after gaining over 6% in the past two weeks following media reports of acquisition discussions. The stock had nearly doubled in value last year and has risen about 12% so far this year before the news emerged. Following the announcement, Amazon shares increased about 1% in trading.
According to the report, Amazon has been working to ramp up its network by deploying approximately 3,200 satellites in Earth's low orbit by 2029, with roughly half required to be in place by a July 2026 regulatory deadline. The company currently operates a network of more than 200 satellites and is preparing to roll out its satellite internet services later this year. In contrast, Elon Musk's Starlink - the dominant satellite-based internet service provider - already serves more than nine million users globally. Globalstar plans to expand its network to 54 satellites, including backups, significantly expanding its current low-Earth orbit capabilities.
In a parallel move, as reported by CNBC TV18, Amazon and Apple, which have invested some $1.5 billion in Globalstar, have signed an agreement to continue powering the satellite-based safety features, such as Emergency SOS and Find My, for iPhone and Apple Watch users. Globalstar, based in Covington, Louisiana, is popular as the service that powers Apple's Emergency SOS feature and offers voice, data, and asset-tracking services to customers across enterprise, government and consumer markets. The acquisition makes Amazon the default satellite service provider for iPhone users, strengthening its position in the competitive satellite internet market.
The acquisition is expected to close next year, subject to regulatory approvals and achievement of specific satellite deployment milestones by Globalstar. According to the report, late last year, Globalstar said a new, Apple-backed network under development would expand its satellite count to 54 satellites, including a small number of backups, significantly expanding its current low-Earth orbit capabilities. The deal represents Amazon's strategic move to compete directly with SpaceX in the rapidly expanding satellite internet market.
