Bayanat and Yahsat merger set to take effect next month

Satellite company will delist its shares on September 30, while the combined entity Space42 will continue to trade on the Abu Dhabi bourse

Bayanat and Yahsat jointly launched the UAE’s first Synthetic Aperture Radar satellite as part of the Earth observation space programme last month. Photo: Bayanat

The merger between Abu Dhabi companies Bayanat and Al Yah Satellite Communications, which will create one of the world’s most valuable listed space companies, will become effective on October 1.

With the combination of the two entities, all assets and liabilities of Al Yah Satellite Communications, better known as Yahsat, will be transferred to Bayanat, “in exchange for newly issued Bayanat shares, which will be allocated to Yahsat shareholders as part of this merger”, Bayanat said in a filing to the Abu Dhabi Securities Exchange on Monday.

Shares of Yahsat will also be delisted from the Abu Dhabi bourse at the close of the last trading day of September, while Bayanat will change its trading symbol on October 1 and the merged entity Space42 will continue to trade on the ADX.

The transaction, announced in December last year and approved by shareholders in April, is being executed through a share swap, with Bayanat remaining as the legal entity. The shareholders of Bayanat and Yahsat will own 54 per cent and 46 per cent, respectively, of the merged entity Space42, the two companies said at the time.

Bayanat, a geospatial data products and services provider majority owned by AI and cloud group G42, was set up to commercialise the UAE's Military Survey Department, a sector of the Armed Forces.

It provides national-level mapping and geospatial products and services for the public and private sectors in the Emirates.

Yahsat is a subsidiary of Abu Dhabi’s sovereign investment arm Mubadala Investment Company and offers satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and the Australasia region.

The merger of the two companies will create an AI-powered space technology company, with a market capitalisation of about Dh11 billion ($2.99 billion) according to their share prices on Monday. Bayanat was trading 2.23 per cent higher at Dh2.29 a share, while Yahsat stocks were up 2.6 per cent at Dh2.01 a share at 12pm UAE time.

The combined entity will help make the UAE a leader in the global space industry, Karim Sabbagh, managing director designate of Space42, said in April.

Competition in the space sector is heating up with more private players entering the industry, which necessitates companies to expand their technical expertise, capital base and broaden their balance sheets to secure a larger market share.

A World Economic Forum report indicates that the global space economy could be worth $1.8 trillion by 2035, up from $630 billion last year, about twice the rate of global gross domestic product growth.

The UAE, the Arab world's second-largest economy, has the largest space sector in the region in terms of investment size and diversity.

In 2022, the Emirates launched a Dh3 billion fund to support its space programme and a new initiative to develop radar satellites.

The excitement about the merger between Bayanat and Yahsat underlines the optimism surrounding the space economy, Jay Zagorsky, a professor of markets, public policy and law at Boston University's Questrom School of Business, told The National earlier this year.

“I wish it [the merger] much success … the more companies and nations focusing on space, the better,” he said at the time.

“The UAE's Mars 2117 project will need many partners to put a settlement on Mars within 100 years. Hopefully, this merger is successful so that the new company can provide some of the resources to make a Mars colony a reality.”