Three major European aerospace companies, Airbus, Thales, and Leonardo, have reached an agreement to merge their satellite activities into a single new company. The merger strengthens Europe’s position in the commercial space sector. It will also compete with Elon Musk’s Starlink (photo).
According to the companies involved, the new organization, set to launch in 2027, will generate annual revenue of around €6.5 billion and employ approximately 25,000 people across Europe. Reuters reported this. Techzine has already reported that Airbus will acquire a 35 percent stake. Thales and Leonardo will each receive 32.5 percent. The company will be under joint control, with a management structure designed to ensure balance between the three parties.
The collaboration is the result of months of negotiations under the code name Project Bromo. The model is inspired by MBDA, the joint European missile manufacturer in which Airbus, Leonardo, and BAE Systems collaborate. By joining forces, the companies hope to realize hundreds of millions of euros in annual synergies, although concrete results are not expected for several years.
Difficult negotiations
Talks among the three companies stalled temporarily earlier this year. Sources reported that the distribution of control and the valuation of the various components were the leading causes of the delay. Ultimately, a breakthrough was achieved in the summer, after which the companies finalized the merger plans. At the same time, political support for the initiative also appears to be emerging.
The merger is intended as a response to the shift in the satellite market. Traditional manufacturers of large geostationary satellites are struggling to compete with the low-cost constellations of small satellites in low Earth orbit. This shift is being led by commercial players such as SpaceX’s Starlink, as well as by American and Asian competitors rapidly gaining market share.
In terms of content, the new company will combine the activities of Thales Alenia Space and Telespazio with various space and digital divisions of Airbus, supplemented by the remaining space activities of Leonardo and Thales SESO. The aim is to create an integrated European player that can offer both manufacturing and services in the space sector.
In recent years, the three companies have jointly cut around 3,000 jobs in their space divisions. No new cuts have been announced, but trade unions will be consulted as the project takes shape.
Regulators must approve merger
Techzine previously reported that the new company may be based in Toulouse, Airbus’s home base. According to sources, the new company’s estimated value is around 10 billion euros.
The merger still needs to be approved by European regulators. In the past, they have been cautious about similar consolidations in the defense and aerospace sector. The top management of Airbus, Thales, and Leonardo emphasize that the project is essential to ensuring Europe’s technological independence and to continuing to play a significant role in the global strategic space industry.