French satellite company Eutelsat is poised to buy British rival OneWeb in a deal that could be announced as early as Monday, two sources close to the negotiations said on Sunday.

The Bharti Airtel’s Sunil Mittal-helmed OneWeb, in which the UK Government too has a minority shareholding, was valued at $3.4 billion in its most recent funding round, one of the sources said. Eutelsat already has a 23 percent stake in OneWeb and is its second-biggest shareholder, a Reuters dispatch said, stating that Bloomberg was the first to report on the matter.

The merger of the two companies would strengthen their position in the race to build a constellation of low-orbit satellites, challenging the likes of Elon Musk-owned SpaceX’s Starlink and Amazon.com Inc’s Project Kuiper.

Demand for satellite launches is expected to accelerate after recent sanctions have sidelined the Russian space launch industry and giant satellite constellations could offer a new channel to beam broadband internet from space.

The tie-up is politically sensitive, as it would bring Indian billionaire Sunil Bharti Mittal, France, China and Britain together as shareholders of the combined entity. Bharti Global is OneWeb’s biggest shareholder.

Eutelsat’s biggest shareholder is France’s state-owned investment bank Bpifrance, with a 20 percent stake. Its fourth-largest shareholder is China’s sovereign fund China Investment Corporation, according to Refinitiv data.

OneWeb, for its part, was rescued from bankruptcy by the British government and India’s Bharti Global. The takeover will leave the British government with a minority stake in the merged business, one of the sources said.

Eutelsat has a market value of 2.4 billion euros ($2.45 billion) on the Paris stock exchange, with a net debt of 3 billion euros as of the end of 2021.

Britain will retain special rights over OneWeb after the deal, the second source said, including a veto over sales to clients deemed dangerous for security reasons and a veto over a change in the location of headquarters.

These special rights also entail a veto over business relations that may compromise the so-called “Five Eyes” intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom and the United States and a say on the supply chain and launch decisions.

Eutelsat declined to comment.

Meanwhile, as reported by Indianbroadcastingworld.com earlier, OneWeb has got necessary permissions from the Indian government to provide high-speed broadband through satellite.

Musk’s Starlink too had tried to get a foothold in the Indian market, but its initial plans to pre-sell its services to Indians was scuppered and the India head for the satellite service quit soon after the authorities made it clear that no pre-selling would be allowed before licences were issued, which have not come through yet.

 Earlier in April, OneWeb in a statement had announced that the company and New Space India Limited, the commercial arm of the Indian Space Research Organisation, have entered into an agreement that will help ensure OneWeb completes its satellite launch programme.

The first launch with New Space India is anticipated in 2022 from the Satish Dhawan Space Centre (SDSC) SHAR, Sriharikota. The launches will add to OneWeb’s total in-orbit constellation of 428 satellites, 66 per cent of the planned total fleet, to build a global network that will deliver high-speed, low-latency connectivity.

Sunil Bharti Mittal, OneWeb Executive Chairman, had said: “This is yet another historic day for collaboration in space, thanks to the shared ambition and vision of New Space India and OneWeb. This most recent agreement on launch plans adds considerable momentum to the development of OneWeb’s network, as we work together across the space industry toward our common goal of connecting communities globally.”

What will happen to this agreement, as and when a merger with Eutelsat comes through, is also not clear.