Amazon closes Globalstar deal

Amazon agreed on April 14 to buy Globalstar for about $11.6 billion, folding the satellite operator into its expanding low-Earth-orbit network. (aboutamazon.com) Globalstar shareholders can choose $90 in cash or 0.3210 shares of Amazon stock for each share they own, with the cash portion capped at 40% of shares tendered. The companies said the transaction is expected to close in 2027 after regulatory approvals. (aboutamazon.com) (investors.globalstar.com) Amazon said Globalstar’s satellites, spectrum licenses and operations team will be used to add direct-to-device service to future versions of its Amazon Leo system. That service is meant to let mobile carriers extend voice, text and data beyond the reach of ground-based cell towers. (aboutamazon.com) Low-Earth-orbit satellites fly much closer to Earth than traditional communications satellites, which cuts delay and makes it easier to connect ordinary phones in remote areas. Amazon has been building that business under the Amazon Leo name as it tries to catch up with SpaceX’s larger Starlink network. (aboutamazon.com) (cnbc.com) The deal also reaches into consumer devices. Amazon said it entered an agreement with Apple for Amazon Leo to power satellite services on supported iPhone and Apple Watch models, including emergency texting, roadside assistance and messages outside cellular coverage. (aboutamazon.com) Globalstar is best known to many consumers as the company behind Apple’s existing Emergency SOS by satellite feature, which made it a strategic asset in the race to connect phones directly from space. Amazon’s offer represented a roughly 117% premium to Globalstar’s price in late October, before Bloomberg reported the company was exploring a sale. (techcrunch.com) (bloomberg.com) Investors treated the announcement as a major reset for both companies. Globalstar shares jumped 9.6% to $79.91 on April 14, while Amazon shares rose 3.8% to $249.02. (finance.yahoo.com) For Amazon, the purchase is its biggest since Whole Foods in 2017, according to Bloomberg, and a faster way to add spectrum and mobile-satellite expertise than building every piece in-house. The next test is regulatory: Globalstar told investors the closing still needs antitrust, foreign-investment and telecommunications approvals. (bloomberg.com) (investors.globalstar.com)