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Airbus, Leonardo, and Thales To Merge Space Businesses In Landmark Agreement
18 hours ago
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Airbus, Leonardo, and Thales have announced a landmark agreement to merge their space businesses into a new joint venture, creating a $7.5 billion (€6.5 billion) European space entity with 25,000 employees, aimed at countering the dominance of Elon Musk’s SpaceX and strengthening Europe’s strategic autonomy in space.

The merger, formalized through a memorandum of understanding signed on October 23, 2025, is expected to begin operations by 2027, pending regulatory approval, and will consolidate their satellite manufacturing, space systems, and services under a single entity, excluding launch vehicle activities.

The combined entity will integrate the space divisions of Airbus (Space Systems and Space Digital), Leonardo (Space Division, Telespazio, and Thales Alenia Space stakes), and Thales (Thales Alenia Space, Telespazio, and Thales SESO optics).

The new company will have a projected annual revenue of $7.5 billion based on 2024 results and a backlog covering more than three years of sales. Ownership will be split with Airbus holding 35%, and Leonardo and Thales each holding 32.5%, reflecting a balanced governance structure despite Airbus contributing roughly half of the combined revenue Airbus will receive compensatory payments to balance the stake split.

The companies anticipate achieving "mid-triple-digit million" euro annual synergies in operating income within five years of closing the deal, with further long-term operational savings expected.

The merger, internally known as "Project Bromo," follows months of negotiations and due diligence, with executives emphasizing the need for scale to compete globally and ensure Europe’s independence in critical space applications like communications, navigation, Earth observation, and national security.

The companies said the joint venture “will accelerate innovation in this strategic market, in order to create a unified, integrated and resilient European space player, with the critical mass to compete globally and grow on the export markets.”

“This proposed new company marks a pivotal milestone for Europe’s space industry. It embodies our shared vision to build a stronger and more competitive European presence in an increasingly dynamic global space market,” said Airbus CEO Guillaume Faury, Leonardo CEO Roberto Cingolani and Thales Chairman and CEO Patrice Caine in a joint statement.

“By pooling our talent, resources, expertise and R&D capabilities, we aim to generate growth, accelerate innovation and deliver greater value to our customers and stakeholders,” they said. “This partnership aligns with the ambitions of European governments to strengthen their industrial and technological assets, ensuring Europe’s autonomy across the strategic space domain and its many applications.”

Regulatory approval is required, with European antitrust authorities expected to take up to two years to review the deal, though political support for a "European champion" is growing amid concerns over reliance on foreign providers like SpaceX.

The merger is driven by the need to respond to the disruptive rise of SpaceX’s Starlink, which has deployed over 8,000 satellites in low Earth orbit, shifting global demand away from traditional high-cost, large geostationary satellites that European firms previously dominated.

The new venture is modeled after MBDA, the successful European missile consortium, and aims to become a "trusted partner" for national sovereign space programs across Europe.

“In Europe, if we step back, there is a lot of fragmentation in terms of projects, fragmentation in terms of players as well,” Alain Fauré, head of space systems at Airbus Defence and Space, said during a briefing at the Paris Air Show in June. A combination, he said then, “can have the strengths of the three companies.”

At the air show, executives said they were close to a decision on whether to proceed with the venture. Cingolani said at one briefing that he expected a “go/no-go decision” by the end of July after completing valuation work and assessing “value creation” from the merger.

“I like to say that one plus one plus one should be bigger than three, otherwise we don’t do it,” he said at the time.

While no immediate job losses are expected, insiders suggest that job cuts may be unavoidable in the long term, despite the companies’ commitment to avoiding site closures

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