Yahoo Finance OneWeb sale risks giving China a stake in ‘Five Eyes’ spying tech
The takeover of taxpayer-backed OneWeb by rival Eutelsat risks handing China a stake in spying technology used by the "Five Eyes" intelligence sharing relationship between Britain and America.
With a deal expected to be announced in days, scrutiny is thought likely to focus on security contracts which OneWeb runs on behalf of the Western alliance because Eutelsat is partly owned by a Beijing-backed sovereign wealth fund.
The board of Paris-headquartered Eutelsat is understood to have met on Sunday to rubber-stamp the takeover of British satellite champion OneWeb, which was rescued from collapse by Boris Johnson in 2020.
OneWeb will be subsumed into the French-listed company with plans to apply for a secondary listing in the UK, sources said.
Government sources insisted that the UK’s “golden share” would be unaffected by the deal. The UK will be able to veto the moving of OneWeb’s London head office, veto sales on national security grounds, with Britain retaining first preference on manufacturing.
The Government will be given a seat on Eutelsat’s board of directors, they added.
Beijing-backed China Investment Corp owns a 5pc stake in Eutelsat, according to stock market filings. Under the terms of the takeover with OneWeb, this will reduce to roughly 2.5pc.
OneWeb became a significant security player last September when it bought TrustComm, a Texas-based company that provides satellite communications and professional services to the US government under the “Five Eyes” intelligence alliance.
The White House continues to take a tough approach towards Beijing-controlled technology companies.
A battle for technological supremacy was triggered by former president Donald Trump’s banning of US federal authorities from using Huawei equipment and 5G networks.
The “Five Eyes” alliance, comprising the UK, US, Australia, Canada and New Zealand can be traced to secret meetings during World War II between code-breakers on either side of the Atlantic.
The sale of OneWeb to Eutelsat is likely to be billed as a merger in the coming days as and when it is announced.
But it risks leaving Britain without a champion in the global scramble to launch communications satellites. OneWeb was originally intended to operate as a rival for Elon Musk’s company Starlink.
It would also likely mean British taxpayers have a minority stake in Eutelsat, which broadcasts TV channels in Russia and has been accused of enabling “the Russian war propaganda machine”.
Eutelsat provides television broadcasting to 15 million Russian households including channels accused by Reporters Without Borders of being “spearheads of the Russian war propaganda machine”.
If the combined business continues to broadcast in Russia, British taxpayers would be left as a major investor in a company facilitating Kremlin propaganda.
OneWeb declined to comment.
