Airbus, Thales, and Leonardo have agreed on the framework for a major European satellite joint venture employing 25,000 people and generating annual revenues of 6.5 billion euros. The headquarters of the venture, which is scheduled to launch in mid-2027, will be in Toulouse, where most of the partners’ satellite activities are already based, according to a senior Airbus executive. Key management functions, however, will also be located at other European sites.

Since Airbus is contributing slightly more capacity, the European aerospace group will hold 35% of the shares, while Leonardo and Thales will each hold 32.5%. The companies stated that the governance structure would ensure a balanced distribution of power among shareholders. Who will occupy which positions – likely determined through a rotation system – has yet to be negotiated, according to well-informed sources. The order backlog currently covers more than three years of revenue, and the merger is expected to generate annual synergies in the mid triple-digit millions of euros at the operating level within five years of completion.

With this merger, which follows more than a year of negotiations, Airbus, Thales, and Leonardo aim to compete more effectively with Elon Musk’s Starlink and Chinese satellite providers. „Against the geopolitical backdrop, there was a risk of falling behind technologically,“ said the Airbus executive. „That’s why this merger sends an important signal.“

Before the new European satellite giant can take off, however, competition authorities must still grant approval. Industry observers believe that Russia’s invasion of Ukraine has prompted a shift in thinking in Brussels. In earlier years, the EU would likely have raised objections. Both Airbus and Thales Alenia Space have faced difficulties in recent years and have announced job cuts for 2024. Airbus expects growth at its German sites following the merger.

Within Airbus, there is an expectation that other stakeholders in Brussels may push for remedies. „Airbus cannot divest business units,“ the executive emphasised. „Otherwise, the new alliance would stand no chance against Space X and China.“

Airbus will contribute its Space Systems and Space Digital units to the new joint venture. Leonardo will bring its Space Division, including its stakes in Thales Alenia Space and Telespazio, while Thales will contribute its holdings in Thales Alenia Space, Telespazio, and Thales SESO. Bringing the German competitor OHB on board was deemed impossible for antitrust reasons, the Airbus executive explained.

Competitors and trade unions, however, have voiced concerns about the planned merger. France’s CGT Métallurgie union criticised it for potentially creating a monopoly, while the more moderate CFE-CGC called on the three groups to refrain from layoffs. The union acknowledged that the merger could strengthen Europe’s position against non-European rivals but warned of overlapping functions and redundancies between Thales Alenia Space and Airbus Defence and Space.

Resistance has also emerged in Italy, where small and medium-sized space companies fear being marginalised. Mario Lisi Turriciani, a member of the board of the Italian Space Agency (ASI), warned that „Italy might cede its key role in the Iris2 project“ – the European satellite constellation designed to provide continent-wide internet coverage – „to France.“

Space expert Alessandro Sannini likewise expressed concern that „Italy’s relatively small space companies could be excluded from future tenders due to the dominance of the new alliance.“ Among Italy’s larger satellite firms is the Italian branch of OHB, which specialises in mini- and microsatellite systems and has maintained a strong presence in the Italian market since integrating Carlo Gavazzi Space in 2009.