Space42’s Karim Sabbagh on the Bayanat-Yahsat merger, spacetech and future plans

Give us a brief overview of the merger between Bayanat AI and Al Yah Satellite Communications Company (Yahsat) to form Space42. What were the driving factors behind this merger?

Creating Space42 was a strategic decision reflecting the progressive vision of the UAE’s leadership to rapidly transform the economy into an innovative, AI-driven ecosystem, bringing together satellite communications and geospatial analytics.

Both businesses bring unique elements: Yahsat contributes advanced satellite communication capabilities that will be merged with Bayanat’s AI-powered geospatial analytics expertise to create Space42.

The new entity will allow us to leverage both companies’ differentiating capabilities, creating a one-of-its-kind, vertically integrated provider of AI-powered geospatial and mobility solutions, Earth Observation, satellite communications, IoT, and business intelligence.

The approved merger between Bayanat and Yahsat will create a unique position for Space42 regarding space assets — owning from the ground, stratosphere, LEO, and GEO orbital layers. This enables us to tackle issues with unmatched precision and efficiency, streamlining the end-to-end process and allowing for unparalleled insights.

However, our approach goes beyond the typical considerations of commercial or financial factors. The combined entity is our strategic response to the rapidly evolving dynamics in spacetech, including the growing universe of new use cases, transformative technologies, and new business models.

By creating a UAE-based global champion in the space technology industry, Space42 will bring significant benefits and value to the UAE. It will support the country’s vision to grow and diversify its economy while positioning the nation at the forefront of advanced technology on a global scale.

How does Space42 align with the strategic objectives of both Bayanat and Yahsat? What synergies do you anticipate from this merger?

The merger is a strategic decision that enables us, as Space42, to target a wider range of sectors and customers through an expanded geographic footprint and enhanced value proposition. Combining the objectives of both companies will create synergies that contribute to expanding our operations in the spacetech sector by leveraging our combined resources and capabilities more effectively.

By combining our geo analytics and satcom capabilities with AI, we enable the development of innovative platforms, products, and applications.

This includes inter-alia joint research and development, new use cases, and commercial and operational synergies. Through this approach, we will create considerable economies of scale, delivering significant benefits to the societies and economies we serve.

The UAE’s space economy sector has rapidly flourished, cementing its reputation in the sector across the MENA region and globally. We are committed to building upon the success of both entities.

How have shareholders and investors responded to the merger and the formation of Space42?

 Bayanat and Yahsat Shareholders voted on April 25 to approve the merger of the two companies.

 The shareholders understand that the merger would create Space42 as one of the world’s most valuable publicly listed space companies and has the potential for significant global growth and synergies.

Space42 shall provide current and potential investors with a proxy to participate in the rapid growth of the space economy sector in the UAE and beyond through its expanding satellite network and the lucrative opportunities presented by the AI-driven use cases across various sectors.

By combining our geo analytics and spacetech capabilities with AI, we are enabling the development of innovative platforms, products, and applications, and the shareholders understand the value these advancements bring to the market.

Are there any regulatory approvals still pending for the merger to become effective?

We expect to complete the merger in the second half of 2024.

The merger’s completion is subject to local and international regulatory requirements, including those of the Telecommunications and Digital Government Regulatory Authority (TDRA), the Securities and Commodities Authority (SCA), and the Abu Dhabi Global Market (ADGM).

How do you believe Space42 will reshape the global space technology landscape, particularly in the Middle East North Africa (MENA) region? What specific services and solutions does Space42 plan to offer?

With Space42, we aim to establish the company as a global leader in AI-powered space technology. The merger reflects the progressive vision of UAE leadership and will reinforce the region’s position as a strong leader in the AI and space technology industries.

The merger allows us to expand into new markets and industries, leveraging Bayanat’s expertise in AI-powered geospatial solutions and Yahsat’s status as the UAE’s flagship satellite solutions provider with a global satellite footprint.

As a combined entity, we are addressing an increasing demand for applications that integrate geospatial analytics with satellite communications, seizing the opportunity to integrate operations between space and ground systems.

Additionally, Space42 will create considerable economies of scale, benefiting the societies and economies we serve. We see enormous potential in this merger by making space applications available to unserved and underserved communities that extend beyond the Middle East.

How do you envision Space42 contributing to the UAE’s National Space Strategy 2030 and the National Strategy for Artificial Intelligence 2031?

Aligned with the ambitious objectives of the National Space Strategy 2030 and the UAE Strategy for Artificial Intelligence 2031, Space42 will accelerate an AI-powered ecosystem that enables growth and transforms the space industry.

Space42 will harness the power of AI from the outset to create a highly efficient operation and provide wide-ranging and comprehensive solutions across the Geospatial Analytics and Satellite Communications domains. We aim to empower and enable growth in the economies and societies we serve.

The technology will provide Space42 with a competitive advantage by optimising design, operations, service, learning and innovation, strongly positioning the UAE globally.

With a combined revenue of Dhs2.8bn and net income of Dhs639m based on the recent 2023 financial results (Bayanat and Yahsat), Space42 is positioned for significant growth. How do you plan to leverage this financial strength to drive business expansion and innovation?

The combined entity will have a strengthened financial position, enhanced technological capabilities, and a diversified product portfolio, which will benefit from long-term value creation through a strong platform for growth with significant revenue synergies and economies of scale.

The merger allows us to expand into new markets and industries, including government solutions, public sector services, critical infrastructure, asset management, telecommunications, smart mobility, and sustainability initiatives.

It will improve operational and financial sustainability, providing long-term security for our investors.

The synergy of satellite and geospatial AI services unlocks revenue and cost synergies, offering sustained operational efficiency and an improved balance sheet.

This strengthened financial position will be supported by a financial framework prioritising investments in sustained business growth and expansion, ensuring robust profitability and returns for our shareholders.

How will Space42 leverage AI-powered geospatial solutions, satcom and other advanced technologies to pioneer innovative solutions?

AI will play a critical role in our ambition to develop and innovate new space products and services and support the UAE’s ambition to become a world leader in AI by 2031.

Creating Space42 and combining the strengths of AI and space technologies could translate into the following industry benefits:

• More than double the field of technology applications that can be deployed in space and enacted on Earth (and break the cycle of incumbency that has handicapped our industry).
• Deliver up to 10x improvements in productivity, for instance, what we can do with the resources we deploy (and transform the space from niche to mass applications).
• Reduce space technologies and applications development and deployment cycles by more than 50 per cent (and break the 15-year development cycle model prevalent in our industry).
• Make space applications accessible and affordable for widespread societal impact (and markedly contribute to improving productivity in the societies and economies we serve).
• By combining our robust geo analytics and satcom capabilities with AI, we enable the development of innovative platforms, products, and applications.
• This approach will create considerable economies of scale, delivering significant benefits to the societies and economies we serve.