Eutelsat Communications (EUTLF) is going big. The European satellite player is in talks to raise 1.5 billion in fresh fundingan injection that could push the French government’s stake from 13.6% to 30%, according to people familiar with the matter. The potential raise isn’t just about growthit’s about geopolitics. Eutelsat has been quietly assembling a coalition of backers, including the UK government, shipping heavyweight CMA CGM, and French investment firm Fonds Strategique de Participations. The money could be used to expand its low-Earth orbit satellite network and stake a firmer claim as Europe’s answer to Elon Musk’s Starlink.
Momentum has been building for months. Eutelsat shares are up around 45% this year, but investors hit the brakes after the fundraising talks surfacedshares fell as much as 7% on the news. One reason: this isn’t a simple growth story. It’s also about national security. Earlier tensions between Donald Trump and Ukrainian President Volodymyr Zelenskiy, followed by concerns Musk might restrict Starlink access in conflict zones, have jolted European policymakers. The response? Double down on homegrown infrastructure. Eutelsat could need over 2 billion just to participate in Iris2, the EU’s critical satellite project, and its LEO satellites require replacements every five to seven years. That’s a lot of capitaland a long game.
Leadership is shifting, too. Jean-Francois Fallacher will take the CEO reins from Eva Berneke on June 1. Sources say the move is part of a broader push by the French government to increase strategic control. While no final deals have been signed, the ongoing talks signal that Paris wants a bigger seat at the tableand investors should take note. With government-backed space assets becoming increasingly critical, the Eutelsat story is evolving fastfrom niche telecom to national interest.
This article first appeared on GuruFocus.