Eutelsat, Starlink's European competitor, is preparing a capital increase that will make the French government its largest shareholder.

French satellite operator Eutelsat, a competitor to Elon Musk's Starlink venture, is preparing a €1.35 billion capital increase that will see the French government become the group's largest shareholder, the company announced in a press release on Thursday, June 19.

The French government, which already holds a 13% stake in the group, will increase its stake by €717 million, according to the office of Economy Minister Eric Lombard. This will bring it to a 29% stake in the company, through the French State Shareholding Agency (APE), at the end of this transaction, which is expected to be completed "by the end of 2025," according to Eutelsat.

"The race is now. That's why we must position ourselves now and invest now. Otherwise, the entire market will be taken and France and Europe will be dependent on other powers tomorrow," the Elysée Palace told Agence France-Presse.

The world's second-largest operator of low-orbit satellites, which provide telecommunications services, Eutelsat is often presented as a European alternative to Starlink, owned by the American company SpaceX, owned by Elon Musk.

With a constellation of more than 600 satellites since its merger with the British company OneWeb in 2023, the group is seeking to expand its contracts with new government clients. On Wednesday, it announced at the Paris Air Show the signing of a ten-year framework agreement with the French army in the field of military space communications, for a maximum amount of €1 billion.

When it published its latest quarterly results, the company announced that it was holding "many discussions with various governments, both European and non-European." The capital increase announced Thursday should notably allow for the renewal of its satellite fleet.

Three other shareholders of the group – the French shipping company CMA CGM, the Indian operator Bharti Airtel and the Strategic Participation Fund, owned by seven French insurers – are also involved in this capital increase, which will take place in two phases, with a reserved capital increase and a preferential subscription right, open to other shareholders. "Discussions are underway with other investors, including the British government," Eutelsat added.

The transaction "represents a crucial step in Eutelsat's strategic and financial roadmap, guaranteeing it the resources necessary to implement its strategic vision," announced the company, which also plans to refinance its debt.