Ahead of a shareholder vote to confirm the establishment of Space42, an AI-powered space technology company, its managing director expressed optimism that it would elevate the UAE’s position in the global space sector.
Karim Sabbagh stated, “We are progressing well with the main activities for executing the merger,” in reference to an upcoming meeting on April 25 where shareholders will vote on the proposed merger. He added, “We’re on track.”
Mr Sabbagh noted that additional regulatory steps were being taken internationally to ensure a smooth merger process.
He explained, “We rely on some western technologies, so when you transfer ownership of these technologies from one entity to another, you have to go through a certain process, but all is unfolding as planned.”
The proposed merger between Abu Dhabi companies, Bayanat and satellite services company Al Yah Satellite Communications (Yahsat), would give rise to Space42, as announced in December last year.
Until the merger is approved, Bayanat and Yahsat will continue operating independently.
If approved, Bayanat and Yahsat shareholders will own 54 per cent and 46 per cent, respectively, of Space42.
According to a circular released by both companies in March, Bayanat and Yahsat collectively generated $700M in revenue and had a net income of $173M for 2023.
The circular stated, “The merger would create one of the most valuable publicly listed space companies in the world with additional potential for significant global growth and synergies.”
A recent report from the World Economic Forum projected that the global space economy could reach $1.8T by 2035, nearly triple its value in 2023.
However, Jay Zagorsky, a professor at Boston University, expressed some skepticism regarding the report’s projections, particularly regarding the impact of space activities on Earth.
Mr Zagorsky cautioned that while the cost of space exploration is decreasing, the rate of its usage might not increase proportionally, potentially affecting the pace of the space economy’s growth.
He also highlighted that the report did not consider inflation in its estimates.
Regarding the Bayanat-Yahsat merger, Mr Zagorsky acknowledged its strategic sense but warned of potential risks, such as corporate culture differences, that could hinder its success.
Nevertheless, he acknowledged the excitement surrounding the merger as a reflection of the optimism in the space economy.
Anna Hazlett, founder of AzurX, a UAE-based space strategy and investment firm, shared Mr Zagorsky’s optimism, stating that the proposed merger could drive regional innovation.
She emphasised Bayanat’s expertise in AI and machine learning, which could complement Yahsat’s satellite communications and Earth observation capabilities.
Ms Hazlett believed that the combination of resources from both companies aligns with her positive outlook on the space sector’s growth potential, according to The National News.
Ryan Brukardt, a senior partner at McKinsey & Company, echoed this sentiment, emphasising the importance of embracing space technology for long-term benefits.
Mr Sabbagh highlighted that the merger would enhance the UAE’s technological sovereignty, comparing it to established tech ecosystems like Silicon Valley.
Space42, described as a new AI-powered space technology company, aims to leverage artificial intelligence to enhance its offerings.
Mr Sabbagh emphasised AI’s potential impact on optimising network operation and management, particularly for assets in space that require sophisticated capabilities.
He also highlighted the advantage of predictive maintenance for space assets, citing the importance of proactive measures to prevent disruptions in service.
The merger would enable Bayanat and Yahsat to utilise their combined geospatial technology and satellite communication capabilities to detect and predict weather-related events, such as sandstorms.
Mr Sabbagh underscored Space42’s commitment to delivering continuous services, ensuring quality standards and meeting mission requirements.
Bayanat and Yahsat both reported revenue growth and profitability in 2023, with Space42 aiming for double-digit growth.
Mr Sabbagh highlighted the satellite communication industry’s stability and profitability, complemented by the high-growth potential of the geospatial intelligence industry.
He stressed the importance of consolidating the capabilities of both companies to drive efficiency and significant growth.
Together, Bayanat and Yahsat aspire to position the UAE as a space innovation hub, fostering regional and global advancements in space technology.
