The controlling interests in European satellite operator Eutelsat changed significantly during the first week of December, as a number of key shareholders announced plans to sell their stakes of the satellite operator to two new major shareholders.

Spanish industrial group Abertis announced Dec. 5 it will pay more than 1 billion euros ($1.3 billion) to acquire a 32 percent stake in Eutelsat. Two days later, Caisse des Depots et Consignations, a French state-owned financial institution, announced it will acquire a 25.5 percent stake in Eutelsat for more than 860 million euros ($1.14 billion).

Abertis, through its telecoms subsidiary, Abertis Telecom, reached agreements with investment funds Texas Pacific Group, Spectrum, Cinven and Goldman Sachs. While the four funds are minority shareholders in Eutelsat, the combined 32 percent stake will make Abertis the largest single shareholder of Eutelsat.

Caisse des D�pots, which performs public interest missions on behalf of France’s central, regional and local governments, will acquire its stake in Eutelsat from investment company Eurazeo. The deal values the Eutelsat shares, which are held by Bluebirds II Participations and RedBirds Participations, two entities controlled by Eurazeo, at 15.70 euros ($20.89) per share.

The deals make Abertis and Caisse des D�pots et Consignations important players on the European satellite landscape and will provide Eutelsat with a solid financial base.

"Following the acquisition announced on 5 December by Abertis to acquire 32 percent of the capital of Eutelsat Communications, this second operation marks the end of the reorganization of the capital of our group. We will now benefit from an association with two leading European groups in infrastructure who will enable us to pursue and accelerate our development," Giuliano Berretta, CEO of Eutelsat, said.

Abertis was attracted by the long-term returns and stable cash flows that a Fixed Satellite Services operator such as Eutelsat can provide, and Jos� Aljaro, the CFO of Abertis, said in a press conference that the acquisition is a "major step" in Abertis’ international strategy, giving the company a strong presence in a number of markets outside of Spain.

Abertis has been aggressive in terms of acquisitions recently. Away from the satellite sector, the Spanish industrial group announced a deal with Autostrade, a major Italian motorway construction and management company.

"This transaction follows the announcement by Eutelsat last month that it had been approached," Sarah Simon, a media equity analyst at Morgan Stanley, said in a research report. "We had previously anticipated a [leveraged buyout]-style transaction, which would potentially look at the company as a whole. The long-term plans of Abertis are not clear (a 33 percent stake is required to trigger a bid in France) but it has indicated that taking full ownership ‘is not necessary in the present circumstances.’ [Abertis] has also stated ‘Eutelsat is destined to become a noteworthy component of Abertis’ core equity investments, within the framework of an investment model based on the principle of commitment to, and invigoration of, growth-oriented industrial projects, guided by a vision of stability and long-term investment horizon.’"

"The deal is highly supportive to SES Global’s valuation and is likely to cement the market’s perception of satellite stocks being stable infrastructure businesses rather than risky TMT plays, Aysha Zaman, a satellite equity analyst at Dresdner Kleinwort, said in a research report. "The strategic rationale for the deal is that it is a complementary business. Satellite operators exhibit similar characteristics to other infrastructure operators, including long-term stable cash flows and high operating margins. The deal represents a discount to recent acquisitions in the sector, reflecting in our view, a discount for non-control."

Aljaro also spoke of further collaboration between Abertis, Spanish satellite operator, Hispasat and Eutelsat but that a merger between the satellite operators was "something that had not been taken into consideration." Eutelsat has almost a 30 percent stake in Hispasat.

Contact, Vanessa O’Connor, Eutelsat, e-mail, [email protected]

Aysha Zaman, Dresdner Kleinwort, e-mail, [email protected]

Sarah Simon, Morgan Stanley, e-mail, [email protected]