France Makes Strategic Move to Compete with Starlink by Investing Heavily in Eutelsat

A Major Step Toward Satellite Sovereignty

Amid rising global geopolitical tensions, France is taking bold action to secure its digital and military communication networks. On June 19, the French government officially announced an investment of over €700 million in Eutelsat, the European satellite operator, signaling a strategic push to rival global players like Elon Musk’s Starlink.

France currently holds 13% of Eutelsat’s shares, but with this latest capital injection, its stake will rise to nearly 30%, making it the company’s largest single shareholder. This move aims to grant Paris greater influence over Eutelsat’s operations and to strengthen France’s position in the space and satellite sector.

Military Partnership and Global Competition

During the Paris Air Show at Le Bourget, Eutelsat revealed it had signed a 10-year deal with the French military, worth up to €1 billion. The contract covers military and space-based communications, further positioning Eutelsat as a key player on the global satellite stage. Currently, only two operators in the world match Eutelsat’s reach—Starlink being one of them.

The goal isn’t just about improving capabilities; it’s about asserting independence. As President Emmanuel Macron emphasized, France must ensure it can “act in orbit” without relying on foreign powers. This is a direct response to Starlink’s dominance—currently responsible for over 60% of satellites in orbit—and the growing influence of Chinese competitors.

Public and Private Investment Surge

To solidify this position, other public and private investors are expected to follow France’s lead, adding nearly €800 million into the company. Major names like shipping giant CMA CGM are already on board. The state’s €717 million share was funneled through the Agence des Participations de l’État (APE), which manages national holdings such as Renault, Atos, and Française des Jeux. Importantly, this strategic investment won’t affect the country’s national budget.

Stock Market Reaction: Eutelsat Shares Soar

Following the announcement, Eutelsat’s stock surged over 34% on the Paris Stock Exchange by midday Friday, making it one of the day’s top performers. The stock had already climbed 14% the day before after securing the defense ministry contract for its low-orbit OneWeb constellation.

This latest move was confirmed by Economy and Finance Minister Eric Lombard, who highlighted that the investment aims to help Eutelsat expand its satellite constellation capabilities and bolster Europe’s digital sovereignty—a key issue for the European Union at large.

Capital Raise and Future Growth

Eutelsat is set to raise €1.35 billion in total, with half covered by the French government. The fundraising round, expected to complete by the end of 2025, is designed to accelerate the company’s expansion into low Earth orbit (LEO) constellations. These are considered crucial for next-generation telecommunications.

The capital increase will be executed at €4 per share—a 32% premium over the 30-day volume-weighted average on Euronext Paris. Financial analysts at Oddo BHF welcomed the elevated share price, noting it would reduce dilution risk compared to issuing shares at lower values.

Debt Restructuring and Financial Stability

Another positive outcome of the recapitalization is a reduced risk of forced debt restructuring. Oddo BHF noted that the funds raised are substantial enough to reassure creditors and ensure refinancing for the coming years. While the bank maintained a neutral rating on Eutelsat stock, it acknowledged that the operation would help the company reduce its debt, refinance market liabilities, access export credit funding, and fully cover medium-term financial needs.