The global deal Viasat and Inmarsat was inconsistent in Russia

The deal of the American satellite company Viasat on the purchase of the European Inmarsat may be invalid in RUSSIA. The company did not request permission for it from the government commission,

The deal of the American satellite corporation Viasat on the purchase of the European Inmarsat may be outside the Russian legal framework. Viasat had to get permission for the deal in all countries where Inmarsat has a business , including in Russia, but there were difficulties with the latter, a source familiar with the preparation of the deal in Russia told RBC. According to him, the Federal Antimonopoly Service, where Viasat sent a request to acquire the asset back in early 2022, notified the company of the need to obtain approval from the government commission for foreign investment control. But in the three months allotted for this, no applications were received.

“According to the procedure, this transaction is subject to consideration by the government commission, but the companies have not submitted applications,” another source close to the government commission told RBC. “Therefore, at the moment there is no decision – no approval, no refusal.” RBC sent a request to the government .

What does Inmarsat do?

Inmarsat is a British satellite communications company founded in 1979, originally as an interstate organization, which previously, among others, included the USSR through the All-Union Association Morsvyazsputnik (later transformed into FSUE Morsviazsputnik). In 1999 Inmarsat was transformed into a joint stock company. Now its constellation includes 14 satellites, which provide telephone services, data transmission, signal transmission for the Global Maritime Distress and Safety System (GMDSS), signals of the European wide-area navigation supplement system EGNOS (European Geostationary Navigation Overlay Service) and a similar American system WAAS (Wide Area Augmentation System). The company also serves airlines, shipping fleet operators,

Inmarsat is present in Russia through a local partner, Morsvyazsputnik, which owns the necessary licenses and frequencies to provide services. In addition, at the beginning of 2014, the company registered a "daughter" - Isat Global Express LLC, hoping to provide commercial broadband Internet access services in the satellite Ka-band through it (for example, Starlink operator Ilona Mask also uses it).

In the fall of 2021, Viasat, which provides high-speed Internet access services for commercial and military customers, announced its intention to buy Inmarsat, and at the end of May this year, the closing of the deal. Inmarsat shareholders received a total of $551 million in cash and approximately 46.36 million shares of common stock in the combined company, with the proviso that no shareholder received 10% or more. Earlier, in April 2022, Inmarsat also paid shareholders a special dividend of $299 million, that is, they received a total of $850 million. At the same time, Viasat's message noted that the deal was approved by US , UK and EU regulators .

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According to RBC's interlocutor, who is familiar with the preparation of the deal in Russia, Inmarsat assured the FAS that after the acquisition of Viasat, Inmarsat intends to continue to provide services for the GMDSS in the Russian market, which is mandatory in accordance with the Convention of the International Maritime Organization. However, Viasat and Inmarsat decided to liquidate Isat Global Express, and this issue must be submitted to the government commission for consideration.

What could be the consequences

Similar problems with the deal, according to a RBC source, have arisen in a number of other countries, in particular in CHINA. “For Inmarsat, as a company committed to supporting the system during disasters, a global presence is important,” the source said. “Other negative consequences of such a legal vacuum, which the company may find itself in, are likely problems with servicing its subscribers when they are in Russia, as well as potential difficulties in the future in obtaining licenses and other permits, etc.” .

A representative of the Ministry of Transport said that Inmarsat had previously “informed the FAS of its responsibility for the functioning of the GMDSS in accordance with the requirements of the IMO (International Maritime Organization. -) Convention.” “Thus, at present, the provision of services in the Inmarsat system is carried out without changes,” he said.

RBC sent a request to Viasat, Inmarsat and Morsviazsputnik.

The representative of the press service of the FAS said that if there is a need to submit a transaction for consideration by the government commission, they notify the applicant about this, and if the latter does not submit a petition and the transaction is not submitted for consideration by the commission, "it should be refused." “If the applicant nevertheless made a transaction in violation of the law, then such a transaction is recognized by the COURT as void,” he said.

Anton Imennov, senior partner at the Pen & Paper Bar Association, explained that if companies do not comply with the procedure for agreeing on a transaction, it may be declared invalid in court at the FAS suit. The agency will have to prove that the transaction has led or may lead to a restriction of competition. “In practice, this will mean that the transaction, as it were, never took place, there was no sale and purchase,” the lawyer concluded. Imennov believes that the FAS redirected the buyer to the government commission, due to the fact that persons from unfriendly states make a deal aimed at acquiring ownership of shares / shares in a Russian legal entity.