TLDR
- Amazon is buying Globalstar ($GSAT) for $11.6 billion in a cash-and-stock deal, offering $90 per share
- The deal gives Amazon key radio frequency spectrum to launch direct-to-device satellite service in 2028
- Globalstar stock jumped 9.6%; Amazon rose 3.8%; rival AST SpaceMobile fell nearly 11%
- Apple’s Emergency SOS satellite service will transition to Amazon’s Leo satellite network
- The acquisition is Amazon’s second largest ever, expected to close in 2027, pending regulatory approval
Amazon is buying satellite firm Globalstar in an $11.6 billion deal aimed at closing the gap with Elon Musk’s Starlink in the fast-growing satellite communications market.
The deal, announced Tuesday, values Globalstar at $90 per share — a premium of over 31% to its April 1 closing price and roughly 117% above its late-October price.
Globalstar shareholders can choose $90 in cash per share or 0.3210 Amazon stock per share. The total cash payout is capped at 40% of the deal.
Amazon stock rose 3.8% to $249.02 on the news. Globalstar surged 9.6% to $79.91. MDA Space, Globalstar’s primary contractor, climbed 9%. AST SpaceMobile, a direct competitor in the direct-to-device space, dropped nearly 11% to $88.57.
The acquisition is expected to close in 2027, subject to regulatory approval from the FCC and deployment milestones.
This is Amazon’s second largest acquisition after its $13.7 billion Whole Foods purchase in 2017.
Why Spectrum Is the Real Prize
Globalstar operates only a couple dozen active satellites, but that’s not really the point. The real value here is spectrum — the FCC-licensed radio frequencies needed to beam connectivity directly to unmodified smartphones.
“Amazon has now repeatedly claimed that their satellite system will offer better service than what’s out there now,” said Caleb Henry of Quilty Space. Amazon CEO Andy Jassy “would not be able to make a claim like that without first acquiring spectrum.”
Amazon’s Leo broadband network currently has roughly 200 satellites in orbit. It has a target of over 7,700 eventually, with about 1,600 required to be in orbit by July under regulatory rules.
Through Globalstar, Amazon plans to launch a direct-to-device service in 2028 — connecting mobile phones directly via satellite without cell towers.
Starlink, meanwhile, already has 10,000 satellites serving around 10 million users globally. It’s been developing its own direct-to-device capability through a partnership with T-Mobile.
Apple Service Moves to Amazon Leo
One notable part of the deal: Apple’s Emergency SOS satellite feature, currently powered by Globalstar on iPhones and Apple Watch, will transition to Amazon Leo.
Apple invested $1.5 billion in Globalstar in 2024 and holds roughly a 20% stake. The company didn’t immediately respond to queries on what happens to that stake post-acquisition.
Amazon has also signed Delta Air Lines to use Leo for in-flight Wi-Fi. Starlink holds a broader airline roster including United, Southwest, British Airways, and Emirates.
FCC Chair Brendan Carr said Tuesday he is “very open-minded” to the deal, calling it a potential catalyst for competition in an emerging market.
“Amazon has been falling behind Starlink on satellite broadband. Acquiring Globalstar allows them to catch up on their D2D spectrum position, and leap ahead on D2D deployment,” said Armand Musey of Summit Ridge Group.
The deal value, Amazon noted, will fluctuate based on its share price until close. Globalstar equity was valued at around $10.8 billion as of April 9.
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