Google Inc (GOOG) is reportedly in talks to buy stake in Virgin Galactic
Google Inc (NASDAQ:GOOG) is currently in talks to buy stake in Virgin Galactic. Virgin Galactic is a space tourism venture that is run by Sir Richard Branson, according to Sky News. Google is working on a project to put hundreds of satellites in low-Earth orbit as part of an attempt to extend Internet access to billions of people.
The negotiations between the two companies have been taking place for several months and are at an advanced stage. Google will invest hundreds of millions of dollars into a joint venture while Virgin Galactic will fold in the technology it has developed to build the world’s first space tourism business.
Google will invest $30 million (£17.8 million) for a small stake in the Virgin Galactic holding company. The terms of the deal are not yet finalized and it could be changed before a deal is made. The $30 million investment could value value Virgin Galactic at around £1.2 billion, which equates to around 1.5% in equity.
Virgin Galactic has insisted that flights should begin this year. Some of the celebrities that have paid to have a ride on a flight include Ashton Kutcher and Katy Perry. They have paid $200,000 to secure seats on the inaugural flights.
Google recently acquired satellite venture company Skybox Imaging for $500 million. Skybox developed small and comparatively cheap satellites, which are capable of taking high-quality photos and videos of the Earth. Google is going to offer Internet to people in emerging countries using balloons (Project Loon), drones, and satellites.
Google also acquired solar-powered drone maker Titan Aerospace in April. Google is working with Titan to build jet-sized drones, which would use solar power to fly uninterrupted for years. The drones may be used to provide online access in remote places across the world.
Virgin Galactic is partially owned by Abu Dhabi-based Aabar Investments. Aabar paid around $280 million for a 32% stake in Virgin Galactic’s holding company. That deal valued Virgin Galactic at around $900 million. The transaction with Google would mean that the equity value more than doubled since 2009.
Sir Richard Branson and Google co-founder Larry Page are close friends. The two of them registered the name Virgle for future business collaborations.