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The merger of a British satellite firm with a French rival faced a backlash last night as a former science minister claimed it handed technology to Europe on the cheap.

London-based OneWeb – which is backed by the UK Government after being rescued by taxpayers from bankruptcy two years ago –agreed to join forces with France’s Eutelsat yesterday.

The deal is expected to be completed by the middle of next year.

The Bank of England is set to reveal the latest decision of its rate-setting Monetary Policy Committee next week

But George Freeman, who quit as Britain’s science minister earlier this month, told the Mail it would ‘hand over another key UK industrial asset to our competitors’.

The deal is billed as a ‘merger of equals’, with OneWeb’s UK future continuing to be safeguarded by the UK Government’s ‘special share’ and ownership of the newly-enlarged company split equally between investors in both firms.

It also gives Britain a veto over any move abroad as well as the power to block sales on national security grounds and first preference on manufacturing and launch site decisions.

But it will ultimately mean OneWeb becomes part of the Paris-listed Eutelsat group – although there are plans for a secondary listing in London.

Freeman said: ‘We will never grow an innovation economy if we keep selling all our best companies to our competitors.’

The deal will also see China’s sovereign wealth fund, an investor in Eutelsat, take a 1.8 per cent holding in the combined company, though it will not have a board seat or access to any information that is not publicly available.

It brings together OneWeb’s pioneering lower Earth orbit (LEO) satellite technology, aimed at allowing access to high-speed internet where traditional ground infrastructure is unavailable, with the older geostationary orbit (GEO) satellites deployed by Eutelsat.

The British and French Governments will each own about 10 per cent.

Freeman said: ‘The EU have long dreamt of having an LEO constellation. This deal gives them one much more cheaply than building their own.

‘But unless our rights are protected, this sale to France’s Eutelsat – with Chinese partners – will hand over another key UK industrial asset to our competitors. 

I hope both [Conservative] leadership candidates will make clear they will not allow it without a commitment to satellite manufacturing, maintenance and insurance in the UK.’

Recent foreign takeovers have seen satellite company Inmarsat being swallowed up by America’s Viasat – a deal being probed by the competition watchdog – and Welsh chip maker Newport Wafer Fab bought by a Chinese-backed Dutch firm – a deal now facing a national security review.

Neil Masterson, OneWeb’s chief executive, defended the deal, citing the advantages of combining LEO and GEO technology.

He said: ‘The business prospects are much stronger together than they are individually.’

A source at the Department for Business said Freeman ‘was involved in the process throughout as the minister responsible and supported the merger’.

The source added: ‘And the golden share is protected – it’s part of the deal. He obviously wasn’t listening in meetings.’

This post first appeared on Dailymail.co.uk