When Guillermo Guerra Martín started working last year on the Indra Group’s planned, purchase of 89.7 per cent of Hispasat, a Spanish satellite operator, he faced formidable obstacles.

The €725mn deal required “very specialist due diligence” because of the many legal, competition and national security issues concerned, according to Guerra Martín, a partner in Madrid-based Gómez-Acebo & Pombo. The transaction, to buy the shares owned by Redeia, Spain’s electricity grid operator, involved “very tough negotiations”, he says.

However, on January 31 this year, Indra was able to announce a deal that should transform its satellite capabilities. The agreement will not only give it control of Hispasat but will also give it 50 per cent of Hisdesat, another satellite owner, which specialises in secure communications for Spain’s government. Indra already owns 7 per cent of Hisdesat, while Hispasat holds 43 per cent.

The deal is still awaiting competition and other approvals before completing.

The transaction is one of a series recently completed or going through the regulatory process in different parts of Europe aimed at giving European countries capability in satellite communications that is independent of the US.

Lawyers have been critical to navigating the multiple complexities of working between different jurisdictions and between the public and private sectors to put deals together.

The central role in the push is likely to be played by Iris², a multi-orbit constellation of small communications satellites funded by the European Commission. Of the project’s expected €10.6bn cost, 61 per cent will come from the commission. The rest will come from an industrial consortium known as SpaceRise consisting of France’s Eutelsat, Luxembourg’s SES and Hispasat.

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The deals have been complex because they have been conducted in a field that is developing fast and have been motivated in many cases by geostrategic considerations as much as by commercial ones.

Indra plans to add its interests in Hispasat and Hisdesat to Deimos, a specialist in small satellites that it acquired in October last year.

“Together with the acquisition of Hispasat, we can say that Indra has become really the leading company, the Spanish champion in the satellite sector,” Guerra Martín says. “There are some areas in which each country must have its own presence.”

European governments are eager to build up their own satellite capabilities to ensure they have an alternative to Starlink, the vast constellation of low-earth-orbit satellites put in place by Elon Musk’s SpaceX, says Sash Tusa, aerospace and defence analyst for Agency Partners, a research group. Governments have been alarmed by some of Musk’s stances on the war in Ukraine.

There have been claims that Musk ordered the turning off of some Ukrainian army Starlink terminals in 2022 at a point when it was conducting a successful counteroffensive against Russia. Musk has declined to comment on the claims about the company’s actions during the counteroffensive and other incidents. Yet in March this year. Musk publicly mused about the effects on Ukraine if he decided to end its access to the system altogether.

“Elon Musk has gone from being the destroyer of the European space industry to arguably its saviour,” Tusa says. “In the past six months, comments he has made . . . [have] fired a massive set of warning shots to Europe. However good Starlink is . . . and, however good SpaceX is, you are ultimately really reliant on a single man and a single country, each of which can turn that access off at any stage.”

Yet it has remained a challenge to build up Europe’s capability, according to Benoit Le Bret, managing partner for the Brussels office of French law firm Gide.

Elon Musk has gone from being the destroyer of the European space industry to arguably its saviour

Sash Tusa, aerospace and defence analyst for Agency Partners

Le Bret, who acted for the European Commission in setting up Iris², says the arrangement had to respect EU competition law demanding a competitive tender for such projects. But it also had to accommodate the realities of Europe’s space sector — that there were only a handful of companies able to deliver such a project and none would be able to do so alone.

“We needed to organise some kind of contest, while being prepared to allow everybody to work together,” Le Bret says.

The transaction was further complicated by the involvement of both the EU and commercial partners. The satellites are the first space vehicles owned by the European Commission.

“It’s a public-private partnership,” Le Bret says. “There’s a lot of commercial risk and EU money and so it’s a first-of-a-kind PPP.”

There were similar considerations around Indra’s purchase of Hispasat, says Guerra Martín. Spain’s government holds a 28 per cent stake in Indra and the involvement of Hisdesat, and its role in handling secure government communications, meant the deal’s significance was more than purely commercial.

Guerra Martín points out that the civil telecommunications aspects of Hispasat’s business are regulated.

But he adds: “We’re not dealing just with a regulated sector but a sector — because of the defence part of the deal — that’s considered a national interest. The idea here is to combine the collaboration with the defence ministry — that’s the one that also regulates Hisdesat — with the private initiative of a Spanish listed company.”

We needed to organise some kind of contest, while being prepared to allow everybody to work together

Benoit Le Bret, Gide

Le Bret, meanwhile, expresses relief that, whatever the complications, European public bodies and companies have started to build their own alternatives to both Starlink and the Kuiper satellite constellation being assembled by Amazon, the US tech group.

He says that, when the system was first being discussed in 2022, Europeans had few concerns about Musk. The now-departed European internal markets commissioner Thierry Breton, who championed the programme, was simply convinced, according to Le Bret, that European governments should have their own system.

Breton’s thinking was that Europe could not continue to depend on “one single guy”, Le Bret says. He adds: “I think what happened afterwards was really confirming that it was a good idea to have such an EU infrastructure.”