European aerospace giants unveiled on Thursday, Oct. 23, a preliminary agreement to merge their loss-making satellite manufacturing operations, joining forces after months of negotiations to counter the rapid rise of rivals led by Elon Musk’s Starlink.
The long-anticipated deal between Airbus, Thales, and Leonardo aims to create a new joint venture launching in 2027, pending approval from European regulators who have blocked similar consolidations in the past. The yet-unnamed entity will employ around 25,000 people across Europe and generate annual revenues of 6.5 billion euros based on 2024 figures, the companies said in a joint statement.
Under the terms of the agreement, Airbus will hold 35% of the venture, while Thales and Leonardo will each own 32.5%. The companies emphasized that the partnership will operate under “a balanced governance structure” with shared control.
The alliance is expected to yield “mid-triple-digit million-euro” annual operating synergies within five years, they added.
Codenamed “Project Bromo,” discussions among the three aerospace groups began last year in an effort to replicate the cooperative model of European missile manufacturer MBDA, jointly owned by Airbus, Leonardo, and BAE Systems.
Europe’s leading satellite makers have long competed to build complex spacecraft for geostationary orbit but have struggled in recent years amid the surge of cheaper, smaller satellites in low-Earth orbit.
In a joint statement, the chief executives of the three companies said the merger would help European governments safeguard “Europe’s autonomy across the strategic space sector.”
Reuters reported earlier this week that the aerospace groups had reached a framework deal for the proposed merger of their satellite businesses.
