Amazon to Acquire Apple's Globalstar Stake in Satellite Deal

Source: MacRumors

Deal Overview

Amazon is acquiring Apple’s stake in Globalstar, the satellite provider that powers Apple’s Emergency SOS via satellite feature. The transaction will be carried out through a merger structure filed with the FCC.

Details of the Transaction

• Amazon will create a new subsidiary, Grapefruit Acquisition Sub II, which will absorb Globalstar’s operations.
• The new subsidiary will then acquire Apple’s equity in Globalstar Licensee LLC, a Globalstar subsidiary that operates the satellite system delivering connectivity to iPhone users in the United States.

Apple currently holds 20 % equity and 20 % voting interests in Globalstar Licensee LLC. The investment, made in 2022, amounted to $450 million and granted Apple 20 % equity plus 85 % of Globalstar’s network capacity.

Impact on Apple and Amazon Services

• Amazon’s Leo satellite network will power existing iPhone and Apple Watch satellite features such as Emergency SOS, Messages via satellite, Find My, and Roadside Assistance via satellite.
• Apple is expected to earn more from the partnership than it invested, while gaining access to a more established satellite operator.
• Amazon will support iPhone and Apple Watch models that use Globalstar’s low‑Earth‑orbit constellation, and the two companies will collaborate on future satellite services running on Amazon’s expanded Leo network.

Source: MacRumors.com