In a significant move for the European aerospace sector, leading industry groups have unveiled a preliminary agreement to merge their satellite manufacturing operations. This strategic consolidation is a direct response to the intense competitive pressure from global rivals, most notably Elon Musk’s Starlink network, following months of negotiations.
A New Joint Venture Set for 2027
The eagerly anticipated deal between Airbus, Thales, and Leonardo is poised to establish a new joint venture, with a planned operational start date in 2027. The formation of this entity remains contingent upon approval from European regulatory bodies, which have historically been cautious about such consolidations within the industry. According to a joint statement, the new, yet-to-be-named company will be a major European employer with a workforce of 25,000 and projected annual revenues of 6.5 billion euros ($7.58 billion), based on 2024 financial figures.
Governance and Anticipated Synergies
The ownership structure will see Airbus holding a 35% stake, while Thales and Leonardo will each control 32.5%. The companies emphasized that the venture will operate under a “balanced governance structure” with joint control. Furthermore, the consolidation is projected to yield significant financial benefits, with the partners forecasting “mid-triple-digit” millions of euros in annual operating income synergies, expected to materialize after the first five years of operation.
Background and Strategic Imperative
The negotiations, conducted under the code-name “Project Bromo,” commenced last year with the strategic objective of replicating the successful cooperation model of MBDA, the European missile manufacturer jointly owned by Airbus, Leonardo, and BAE Systems. This merger is a reaction to a shifting market landscape, where Europe’s premier satellite manufacturers, traditionally focused on complex geostationary orbit spacecraft, are now facing disruption from the proliferation of low-cost, small satellites in low Earth orbit.
Finalizing the Landmark Agreement
The agreement will integrate the manufacturing and service operations of Thales Alenia Space and Telespazio—both joint ventures between Leonardo and Thales—along with various Airbus space and digital businesses, and the remaining space activities owned by Leonardo and Thales SESO. While the three companies have already collectively reduced approximately 3,000 space-related jobs, the announcement did not specify any further workforce reductions, though it confirmed that labor unions will be consulted on the project. This framework deal, reported by Reuters earlier in the week, was finalized after talks previously encountered obstacles during the summer concerning governance and valuation, overcoming a history of occasionally strained relations between the partners.
