Abu Dhabi - Mubasher: The board members of Bayanat AI and Al Yah Satellite Communications Company (Yahsat) proposed a merger of the two listed entities to establish an AI-powered space tech firm in the MENA region.

The joint venture (JV) will have an implied market cap of over AED 15 billion ($4 billion), based on both entities’ closing share prices as of 18 December 2023, according to a press release.

The combined entity will capture regional as well as international opportunities in geospatial and mobility solutions, satellite communications, and business intelligence.

Furthermore, the two listed firms will leverage the enhanced AI-powered technological capabilities and the diversified product portfolio to establish a platform. It will aim to boost space-based services with an effective impact on societies and economies.

Meanwhile, the proposed transaction will be executed through a share swap with Bayanat as the remaining legal entity.

Bayanat’s shareholders will own nearly 54% of the combined entity, while Yahsat’s shareholders will hold the remaining 46% stake.

Group 42 (G42), Mubadala Investment Company, and International Holding Company (IHC) will own approximately 42%, 29%, and 8% of the combined entity, respectively.

Tareq Al Hosani, Chairman of Bayanat, said: “This merger will unite two leading home-grown companies to create the MENA region’s first AI-powered space technology company.”

“Leveraging our complementary assets, capabilities, and ambitions will allow us to expand across the space value chain and offer an unparalleled service to our combined customer base,” Al Hosani continued.

He indicated: “Together, we will leverage our key synergies to reinforce our position as a key engine of growth and strategic solutions provider to the UAE government and its agencies while expanding our reach to global customers.”

Musabbeh Al Kaabi, Chairman of Yahsat, commented: "The enlarged entity will benefit from accelerated growth potential as a player of scale with enhanced competitive advantage.”

The transaction is subject to several conditions, including regulatory approvals from the Securities and Commodities Authority (SCA), the ADGM Registration Authority, and the shareholders of Bayanat and Yahsat.

Bayanat and Yahsat will continue to operate independently until the merger is effective, which is expected to take place in the second half (H2) of 2024.

The partnership followed the two ADX-listed companies’ announcement in November to widen the synthetic aperture radar (SAR) satellites across the Middle East.