PARIS, March 29 (Reuters) – Satellite company SES (SESFg.LU) confirmed on Wednesday that it was in talks with U.S. rival Intelsat over a possible combination of their businesses that would create an industry giant.

SES’ statement came after a Bloomberg report said the two companies were nearing a deal valued at more than $10 billion including debt.

“In response to rumours in the market, SES S.A. confirms that the company has engaged in discussions regarding a possible combination with Intelsat,” SES said.

“At this stage, there can be no certainty that a transaction would materialise.”

SES is aiming to reach an agreement with Intelsat as soon as the next few weeks, Bloomberg said, citing sources. Intelsat declined comment.

Merger talks between the two signal further consolidation in the rapidly changing satellite Internet industry to challenge the likes of Elon Musk-owned SpaceX’s Starlink and Amazon.com’s (AMZN.O) Project Kuiper.

Demand for satellite launches is expected to accelerate after recent sanctions sidelined the Russian space launch industry, and giant satellite constellations could offer a new channel to beam broadband Internet from space.

French satellite firm Eutelsat (ETL.PA) is in the process of buying Britain’s OneWeb, with the deal expected to be finalised in the second or third quarter of this year and aiming to offer fast internet services by satellite.

The Paris-listed shares of Luxembourg-based SES (SESFg.LU), rose 3.4% on the report of the two sides nearing a deal, according to traders.

Reporting by Jose Joseph in Bengaluru and Sudip Kar-Gupta in Paris; Writing by Silvia Aloisi, Editing by Maju Samuel, Sharon Singleton and Tomasz Janowski

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