A merger of two global satellite giants has been given the green light by the competitions watchdog after an in-depth probe into the multibillion-pound deal.

The £5.4 billion takeover of UK firm Inmarsat by US firm Viasat is not expected to limit competition in the satellite sector, the Competition and Markets Authority (CMA) concluded.

An investigation into the deal was launched in October amid concerns that it could lead to airlines facing higher prices for wifi on board.

Both companies supply businesses around the world with satellite connectivity that means services like the internet, email, and video calling can run – including on an aircraft.

The CMA said it gathered evidence which found the satellite communications sector is expanding rapidly, due to heightened demand for connectivity amid the ever-growing use of the internet by businesses and consumers.

All the evidence has shown that the sector will continue to grow as the demand for satellite connectivity increases

New players providing connectivity for wifi on flights have been entering the field, including Starlink, operated by billionaire Elon Musk’s SpaceX, acting as rivals to the merged firm.

Other established firms, such as Panasonic and Intelsat, are investing in new sector partnerships to enhance their offering to airlines, the CMA said.

Both have signed agreements with new rival OneWeb to use its satellite fleet.

It all means that the combined Inmarsat and Viasat is not expected to monopolise the market and push up prices for customers.

Richard Feasey, chair of the inquiry group carrying out the second phase of the investigation, said: “The satellite communications sector is evolving at rapid pace – new companies are entering the market, more satellites are being launched into space, and firms are exploring and entering into new commercial deals.

“All the evidence has shown that the sector will continue to grow as the demand for satellite connectivity increases.

“After carefully scrutinising the deal, we are now satisfied that, following the merger, these developments will ensure that both airlines and their UK customers will continue to benefit from strong competition.”

The takeover was agreed in November 2021, described at the time as a “transformative” deal for the global communications industry.