Amazon set to acquire satellite firm Globalstar to expand low-Earth orbit network

On March 14, Amazon Inc. made headlines with its announcement to acquire Globalstar, a satellite communications firm, in a deal estimated at $11.57 billion. This strategic acquisition is set to bolster Amazon's ambitions in the low-Earth orbit (LEO) satellite sector under its Amazon Leo initiative. The integration of Globalstar’s advanced satellite infrastructure and spectrum licenses will enable Amazon to extend its connectivity services beyond conventional cellular networks. This enhancement is particularly significant for users in remote locations, as it is expected to provide uninterrupted voice, data, and messaging services. Panos Panay, Senior Vice President of Devices & Services at Amazon, expressed enthusiasm about the merger, stating, "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." Additionally, the partnership will support Apple users through the Leo D2D system, enhancing features such as Emergency SOS, messaging, and location sharing on existing and future Apple devices. This collaboration marks a continuation of the fruitful relationship between Apple and Amazon, as highlighted by Greg Joswiak, Senior Vice President of Worldwide Product Marketing at Apple. Looking ahead, Amazon plans to introduce a next-generation direct-to-device satellite system by 2028, which promises to offer voice, text, and data connectivity directly from satellites without the need for ground-based towers. This is anticipated to deliver improved efficiency, quicker speeds, and wider coverage than current solutions. In terms of the acquisition details, Globalstar shareholders can opt for either $90 in cash or Amazon stock per share, with stock options capped at the same cash value. However, cash payouts will be limited to 40% of total shares, with any excess converted into stock. Notably, the deal could see a reduction of up to $110 million if Globalstar does not meet specific operational milestones. With 58% of voting shareholders already approving the transaction, the merger is on track to close in 2027, pending regulatory approvals and satellite deployment targets.