Globalstar’s shares surged over 9% in premarket trading, having gained more than 6% in the last two weeks following reports of ongoing discussions. The stock nearly doubled in value last year and has increased about 12% so far this year, prior to the acquisition announcement. Amazon’s stock also rose about 1% on Tuesday.
This acquisition provides Amazon with access to Globalstar’s network of approximately two dozen satellites, reinforcing its ambition to challenge SpaceX’s Starlink, which currently operates around 10,000 satellites in orbit.
As part of the agreement, shareholders of the satellite firm can choose to receive either $90 in cash or 0.3210 shares of Amazon common stock for each share of Globalstar they own, according to the companies.
Amazon has been endeavoring to expand its satellite network by launching around 3,200 satellites into low Earth orbit by 2029, with about half required to be operational by a regulatory deadline in July 2026.
Currently, Amazon manages a network of over 200 satellites and is set to launch its satellite internet services later this year.
In contrast, Starlink, the leading satellite-based internet service provider established by Elon Musk, already caters to more than nine million users worldwide.
Globalstar, based in Covington, Louisiana, is known for providing the support for Apple’s “Emergency SOS” feature and operates roughly two dozen satellites in low Earth orbit. Late last year, it announced a new Apple-backed network in development, which aims to expand its operations to 54 satellites, including a few backups.
Globalstar delivers voice, data, and asset-tracking services to clientele in the enterprise, government, and consumer sectors.
Additionally, Amazon and Apple, which have jointly invested around $1.5 billion in Globalstar, have entered into an agreement to continue facilitating satellite-based safety features, including Emergency SOS and Find My, for iPhone and Apple Watch users.
The acquisition is anticipated to be finalized next year, pending regulatory approvals and the attainment of specific satellite deployment milestones by Globalstar.
