When Guillermo Guerra Mart\u00edn started working last year on the Indra Group\u2019s planned, purchase of 89.7 per cent of Hispasat, a Spanish satellite operator, he faced formidable obstacles.<\/p>\n
The \u20ac725mn deal required \u201cvery specialist due diligence\u201d because of the many legal, competition and national security issues concerned, according to Guerra Mart\u00edn, a partner in Madrid-based G\u00f3mez-Acebo & Pombo. The transaction, to buy the shares owned by Redeia, Spain\u2019s electricity grid operator, involved \u201cvery tough negotiations\u201d, he says.<\/p>\n
However, on January 31 this year, Indra was able to announce a deal<\/a> 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\u2019s government. Indra already owns 7 per cent of Hisdesat, while Hispasat holds 43 per cent. <\/p>\n The deal is still awaiting competition and other approvals before completing.<\/p>\n 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.<\/a><\/p>\n 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.<\/p>\n The central role in the push is likely to be played by Iris\u00b2, a multi-orbit constellation of small communications satellites<\/a> funded by the European Commission. Of the project\u2019s expected \u20ac10.6bn cost, 61 per cent will come from the commission. The rest will come from an industrial consortium known as SpaceRise consisting of France\u2019s Eutelsat, Luxembourg\u2019s SES and Hispasat.<\/p>\n More on FT.com: Best practice case studies<\/p>\n Read the FT Innovative Lawyers Europe \u2018Best practice case studies\u2019, which showcase innovations in the legal sector:<\/p>\n Practice of law<\/a> 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.<\/p>\n Indra plans to add its interests in Hispasat and Hisdesat to Deimos, a specialist in small satellites that it acquired in October last year.<\/p>\n \u201cTogether with the acquisition of Hispasat, we can say that Indra has become really the leading company, the Spanish champion in the satellite sector,\u201d Guerra Mart\u00edn says. \u201cThere are some areas in which each country must have its own presence.\u201d<\/p>\n 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\u2019s SpaceX, says Sash Tusa, aerospace and defence analyst for Agency Partners, a research group. Governments have been alarmed by some of Musk\u2019s stances on the war in Ukraine.<\/p>\n 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\u2019s 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.<\/p>\n \u201cElon Musk has gone from being the destroyer of the European space industry to arguably its saviour,\u201d Tusa says. \u201cIn the past six months, comments he has made\u2009.\u2009.\u2009. [have] fired a massive set of warning shots to Europe. However good Starlink is\u2009.\u2009.\u2009. 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.\u201d<\/p>\n Yet it has remained a challenge to build up Europe\u2019s capability, according to Benoit Le Bret, managing partner for the Brussels office of French law firm Gide.<\/p>\n Elon Musk has gone from being the destroyer of the European space industry to arguably its saviour<\/p>\n Sash Tusa, aerospace and defence analyst for Agency Partners<\/p>\n Le Bret, who acted for the European Commission in setting up Iris\u00b2, 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\u2019s space sector \u2014 that there were only a handful of companies able to deliver such a project and none would be able to do so alone.<\/p>\n \u201cWe needed to organise some kind of contest, while being prepared to allow everybody to work together,\u201d Le Bret says.<\/p>\n 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.<\/p>\n \u201cIt\u2019s a public-private partnership,\u201d Le Bret says. \u201cThere\u2019s a lot of commercial risk and EU money and so it\u2019s a first-of-a-kind PPP.\u201d<\/p>\n There were similar considerations around Indra\u2019s purchase of Hispasat, says Guerra Mart\u00edn. Spain\u2019s 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\u2019s significance was more than purely commercial.<\/p>\n Guerra Mart\u00edn points out that the civil telecommunications aspects of Hispasat\u2019s business are regulated.<\/p>\n But he adds: \u201cWe\u2019re not dealing just with a regulated sector but a sector \u2014 because of the defence part of the deal \u2014 that\u2019s considered a national interest. The idea here is to combine the collaboration with the defence ministry \u2014 that\u2019s the one that also regulates Hisdesat \u2014 with the private initiative of a Spanish listed company.\u201d<\/p>\n We needed to organise some kind of contest, while being prepared to allow everybody to work together<\/p>\n Benoit Le Bret, Gide<\/p>\n 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.<\/p>\n
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