Rocket Lab is set to acquire a satellite communications operator. Its business model will become more similar to SpaceX's

Space company Rocket Lab has agreed to acquire satellite communications operator Iridium Communications for $8 billion. The deal will allow the company to combine satellite manufacturing, rocket launches, and its own global communications network, bringing its business model closer to SpaceX’s strategy with Starlink, according to Reuters.

Rocket Lab will acquire Iridium at a price of $54 per share, according to a joint statement from the companies. This values Iridium at approximately $8 billion. The transaction is expected to close in mid-2027. Iridium shareholders will receive $27 in cash and Rocket Lab shares: the deal represents a 24% premium over the satellite communications operator’s closing share price on Friday, June 26.

Following the announcement of the deal, Rocket Lab's stock rose by about 12% on June 29, while Iridium's stock gained about 22%.

The acquisition will be the largest in Rocket Lab’s history and will accelerate the company’s strategy to transition from a space launch service provider to a vertically integrated space company, according to the press release. Together with Iridium, it will acquire an operational satellite network in the L-band (used for aircraft and ship navigation), licensed radio spectrum, and more than 2.5 million subscribers in the government, defense, aviation, maritime, and commercial sectors.

“We’re gaining a very profitable business in the form of Iridium, a virtually new satellite constellation, and, of course, most importantly, the radio frequency spectrum,” Rocket Lab founder and CEO Peter Beck told Reuters. “This is a turning point for the space industry and the beginning of a new era of strategic, accelerated growth for Rocket Lab and Iridium.” Iridium has set the gold standard for secure, mission-critical global satellite communications, he asserts.

Rocket Lab also hopes that the acquisition will enable it to enter the rapidly growing direct-to-device market, which allows for direct satellite communication with smartphones and other devices.

The deal will bring Rocket Lab closer to SpaceX’s business model, which combines rocket launch services with its own satellite communications operator, Starlink. Following the acquisition of Iridium, Rocket Lab will be able to integrate satellite manufacturing, rocket launches, and satellite communications services into a single business, according to Reuters.

The acquisition of Iridium strengthens Rocket Lab’s position and makes the company a direct competitor to Starlink, according to Marketwatch. However, Iridium’s management has previously stated that it does not view SpaceX’s satellite network as a critical threat to its business. In February 2026, CEO Matthew Desh stated that Iridium had proven it was not a “company in decline” and dismissed concerns about its ability to compete with Starlink in the long term. In March, CFO Vincent O’Neill noted that Starlink would eventually “impact some limited areas of our business,” but he estimated that this would only happen after several years of further network expansion, according to MarketWatch.

Rocket Lab ranks second behind SpaceX in terms of the number of space missions among U.S. companies, but its new Neutron rocket is currently behind schedule and will be smaller than Elon Musk’s Falcon 9, according to Bloomberg. Last week, NASA selected Rocket Lab for three launches, which are scheduled to begin early next year.

This article was AI-translated and verified by a human editor