Amazon announced Tuesday that it will acquire Globalstar in an $11.57 billion deal, strengthening its growing satellite business as it works to close the gap with Elon Musk’s Starlink.
Tech companies are investing billions to tap into the high-value satellite connectivity market, though matching Starlink’s vast network of over 10,000 satellites remains a significant challenge. With this acquisition, Amazon will add Globalstar’s roughly two dozen satellites to its existing fleet of more than 200.
Amazon is accelerating efforts to expand its satellite network, aiming to deploy around 3,200 low-Earth orbit satellites by 2029, with about half expected to be operational before a key July regulatory deadline. The company is also gearing up to launch its satellite internet services later this year.
Globalstar’s system is built for dependable, low-bandwidth connections directly to mobile devices known as Direct-to-Device (D2D). This technology eliminates the need for traditional ground-based cell towers, making it especially valuable for emergency communications and providing coverage in remote or underserved areas.
The companies said the deal will enable Amazon to begin rolling out Direct-to-Device (D2D) services starting in 2028.
Meanwhile, Starlink already serves more than 9 million users worldwide. The SpaceX division, known for delivering high-speed broadband via user terminals, is also advancing its own D2D capabilities through partnerships with telecom providers such as T-Mobile.
“Amazon has been trailing Starlink in satellite broadband,” said Armand Musey, president and founder of Summit Ridge Group. “By acquiring Globalstar, it can strengthen its D2D spectrum position and potentially move ahead in deploying these services.”
Its proposed data center constellation would dwarf Starlink’s current network by several magnitudes
Shares of Louisiana-based Globalstar surged more than 10%, building on gains of over 6% in the past two weeks amid reports of ongoing deal talks. Amazon’s stock also climbed 3%.
Meanwhile, MDA Space, the main contractor for Globalstar’s next-generation satellite constellation, saw its shares jump by 9%.
Apple–Globalstar Partnership to Continue
Globalstar currently supports satellite-powered safety features like Emergency SOS and Find My for Apple iPhone and Apple Watch users. Amazon confirmed it has reached an agreement with Apple to maintain these services going forward.
Apple invested around $1.5 billion in Globalstar in 2024 to support the expansion of its iPhone communication services, a deal that also gave the company a 20% stake in the satellite firm.
Late last year, Globalstar revealed that a new Apple-backed network in development would grow its constellation to 54 satellites—including a small number of backups—up from roughly two dozen currently in operation. Apple did not immediately respond to a Reuters request for comment on its current stake in the company.
SpaceX’s Continued Dominance
Amazon’s move comes shortly after SpaceX advanced plans for a potential IPO. Elon Musk’s company has been rapidly deploying Starlink satellites, launching them in large batches and building the world’s largest satellite constellation. Starlink is estimated to account for between 50% and 80% of SpaceX’s revenue.
“There has been ongoing consolidation in the sector as companies try to compete with SpaceX in the satellite communications market, given its scale and near-unlimited launch capacity,” said Austin Moeller, director of equity research at Canaccord Genuity. “I expect this trend to continue.”
Under the terms of the Amazon deal, Globalstar shareholders can choose to receive either $90 in cash or 0.3210 shares of Amazon common stock for each share they hold. Reuters based the overall deal value on the $90 per-share offer.
The offer represents a premium of more than 31% over Globalstar’s closing price on April 1, the day before reports of the deal surfaced. Amazon noted that the total value of the transaction will fluctuate with its share price until completion, adding that Globalstar’s equity was valued at about $10.8 billion as of April 9.
The acquisition is expected to close next year, pending regulatory approvals and the achievement of certain deployment milestones by Globalstar. It will also require approval from the U.S. Federal Communications Commission, whose chair, Brendan Carr, said in an interview with CNBC that the agency remains “very open-minded” about the deal.
Source: Reuters Edited by Bernie
