Apple will invest up to $1.5 billion in Globalstar to fund the expansion of its iPhone communications services, the satellite communications provider said in a regulatory filing on Friday.

Shares of Globalstar jumped more than 30%, while Apple fell about 1.4% on the day after forecasting tepid quarterly revenue growth.

Under the financing agreement, Apple will provide $1.1 billion in cash and also acquire a 20% stake in Globalstar for $400 million. The satellite company said it would use part of the funds to repay debt.

The move is another in a partnership between space companies and mobile service providers seeking to bring satellite connectivity to customers in regions with limited network access.

Globalstar also said it would dedicate 85% of its network capacity to Apple. The deal is expected to close on Tuesday.

In 2022, the iPhone maker partnered with Globalstar to create a feature that would allow Apple users to send emergency messages from remote areas.

© Thomson Reuters 2024

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