Three major European aerospace companies have reached an agreement to combine their satellite businesses in a bid to take on Elon Musk’s SpaceX in the global space market.
Leonardo, Airbus, and Thales announced the preliminary deal after months of negotiations between the defense contractors. The merger will form a new company expected to bring in roughly €6.5 billion, or $7.5 billion, in yearly sales. Under the ownership structure, Airbus will hold a 35 percent share while Leonardo and Thales will each own 32.5 percent.
Company leaders say they want to build a space partnership similar to MBDA, the missile business jointly owned by Airbus, BAE Systems, and Leonardo. However, combining these struggling operations represents just the first hurdle. The bigger question is whether this new entity can actually go head-to-head with American and Chinese competitors down the road.
Time is running short to mount a serious challenge against SpaceX. The American company has grown even more powerful as space becomes crucial for military purposes, communications networks, and other business uses. Europe’s overdependence on SpaceX for space and defense has become a growing concern among industry leaders.
The partners expect the combined business to start operating in 2027, pending approval from regulators and other standard requirements. Airbus plans to bring its Space Systems and Space Digital units into the venture. Leonardo will contribute its operations, including Telespazio, while Thales will add Thales Alenia Space, Telespazio, and Thales SESO.
Strategic defense spending drives merger
The three firms are teaming up as European nations gear up to spend trillions of euros on defense to reduce reliance on outside powers. This spending wave may offer Airbus, Leonardo, and Thales their last real shot at creating a European space powerhouse.
Talk of a European space merger has circulated for years. The push gained momentum in 2024 when top European Union officials demanded a major change in approach to keep Europe competitive. News emerged in February that Airbus had brought in Goldman Sachs to provide guidance on the effort, which was still in early exploration then.
The three-way talks moved slowly due to complicated issues around merging workforces numbering in the thousands, mainly located in Italy and France. The companies also had to work through ownership splits and antitrust concerns.
Leonardo’s chief executive, Roberto Cingolani, said back in June he thought the discussions would wrap up by late July. By September, reports indicated the project was moving forward, and a deal might get done that month.
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Source: https://www.cryptopolitan.com/eu-companies-reach-agreement/
