KEY TAKEAWAYS: Amazon will acquire Globalstar for approximately $11.57 billion in cash and stock. The deal strengthens Amazon’s position in the direct-to-device satellite communications market. Globalstar’s spectrum licenses and infrastructure are viewed as the acquisition’s key assets. Amazon aims to compete more aggressively with SpaceX‘s Starlink network and expand future D2D connectivity services.   In a deal that transforms the competitive dynamics of the satellite internet market, Amazon has agreed to acquire Covington, LA-based Globalstar, Inc. for approximately $11.57 billion. This deal marks a major step in Amazon’s efforts to build a global direct-to-device (D2D) satellite communications platform and compete with SpaceX’s Starlink network. Under the terms of the transaction, Globalstar shareholders will receive $90 per share in a mix of cash and Amazon stock.  According to Reuters, this represents a 31% premium to Globalstar’s April 1 closing price – the day before reports of deal talks emerged. With quarterly revenue of $70.95 million (annualized at roughly $282 million), the value is approximately 41 times annual revenue. The transaction is expected to close in 2027, subject to regulatory approvals and certain deployment milestones. A spectrum-driven acquisition While Globalstar operates a relatively small constellation of 24 satellites, the value of the acquisition lies more in its L-band and S-band spectrum rights that are globally licensed and operational across multiple countries, its ground infrastructure and its operational expertise. By acquiring Globalstar, Amazon instantly gains the ability to offer D2D services – including voice, text and data – bypassing years of regulatory approvals necessary in an organic licensing path.  Chris Quilty, founder of Quilty Space, summarized this dynamic to Tech-Insider, noting that “Amazon is buying time as much as it is buying assets.” The transaction comes at a pivotal moment for Amazon’s satellite initiative, Amazon Leo, in which it has already committed $10 billion. (Leo is an industry acronym for low-Earth-orbit satellites). Globalstar’s capabilities provide Amazon with a complementary layer to its broadband-focused network, enabling it to expand into D2D connectivity without relying solely on ground-based terminals. Building Amazon’s space-to-cloud connectivity supports applications across AWS cloud services, logistics tracking, and remote infrastructure monitoring, reinforcing Amazon’s ability to deliver end-to-end connectivity solutions. The companies have indicated that this technology could support Amazon’s D2D rollout as early as 2028. Competing with Starlink Amazon’s move comes as competition intensifies across the satellite communications industry. SpaceX’s Starlink remains the dominant player, benefiting from a significant lead in satellite deployment. Starlink has a network of more than 10,097 satellites and 10 million subscribers worldwide. In contrast, Amazon trails far behind with only 241 satellites in orbit, a fraction of the 3,236 satellites authorized by the FCC for its full constellation. The company faces a regulatory deadline to have 1,618 satellites operational by July 2026.  Amazon has asked the FCC for a 24-month extension to meet this deadline. “Amazon has been falling behind Starlink on satellite broadband,” said Armand Musey, president of Summit Ridge Group, a business valuation and consulting firm familiar with the industry. “Acquiring Globalstar allows them to catch up on their D2D spectrum position, and leap ahead on D2D deployment.” Despite the strategic benefits, the acquisition does not eliminate the challenges facing Amazon’s satellite ambitions, including regulatory approvals, launch capacity constraints, and the need to scale its constellation. Positioning for the next phase of connectivity At the center of this transaction is the rapidly developing D2D satellite market, which analysts project will exceed $15 billion by 2035, according to Precedence Research. “The D2D satellite market is where the real value creation happens over the next decade,” said Tim Farrar, a satellite communications analyst at TMF Associates.  “Amazon buying Globalstar isn’t just about catching up to Starlink – it’s about positioning for a market that barely exists today but will be enormous by 2030.” Amazon’s acquisition reflects a differentiated strategy, where satellites connect directly to smartphones and IoT devices. Unlike traditional satellite internet, which requires dedicated equipment, D2D technology enables connectivity directly through standard smartphones, expanding access to communication services in remote or underserved areas and supporting critical applications such as emergency response and industrial IoT. By combining Globalstar’s spectrum with its own satellite constellation and cloud infrastructure, Amazon is making a long-term bet a hybrid connectivity platform spanning broadband, mobile, and enterprise use cases. The deal also introduces new dynamics with existing partners, particularly Apple, which relies on Globalstar’s network for satellite-enabled iPhone features. While Amazon has indicated these services will continue, the long-term implications of a competitor controlling this infrastructure could reshape future partnerships, as Apple may look to reduce its reliance on a platform soon to be owned by Amazon. G.F. Gay Le Breton is managing director for Chaffe Associates Inc., working in the corporate finance activities of the firm. Mitch Murray is a corporate finance analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC. For more information, visit http://chaffe-associates.com. ...read more read less