Iridium Communications agreed to take full control of Aireon, the airplane tracking joint venture, by purchasing its 61% stake for $368 million. The satellite operator plans to assume an additional $155 million in debt as part of the deal, betting it can grow the air data provider into a more substantial business. Nav Canada, which oversees air traffic across Canada, is among the sellers.
The acquisition gives Iridium complete ownership of a technology that monitors global aircraft movements in real-time. Previously, the company only held a minority position in the joint venture. Investors reacted positively, pushing Iridium's shares up 2.23% following the announcement. The deal represents a strategic expansion into aviation safety data services.
For Aireon, the transaction ends its status as a joint venture and positions it under Iridium's full operational control. The company has struggled to achieve widespread adoption of its satellite-based aircraft tracking system. Iridium now controls both the satellite infrastructure and the tracking service, potentially creating efficiencies in the aviation data market.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing