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Three prominent EU-based space technology firms—the Airbus Group, Leonardo S.p.A., and Thales Group—have sealed a major deal to merge their space operations. The partnership aims to establish a unified European tech enterprise capable of competing with the SpaceX venture.

Economic Aspects and Ownership Structure

The resulting company is projected to achieve yearly revenue of around 6.5 billion euros (5.6 billion pounds). Under the arrangement, Airbus will hold a 35% share in the new business. Meanwhile, both Leonardo and Thales will each retain 32.5% ownership.

Scale and Objectives of the Joint Company

This yet-to-be-named merger represents one of the biggest partnerships of its kind across the European continent. It will bring together various capabilities in building satellites, space systems, parts, and support services from leading aerospace and defence producers.

Guillaume Faury, Leonardo's chief executive, and Thales's CEO collectively stated, “The new venture marks a crucial milestone for Europe's space industry.” The executives continued, “By pooling our expertise, assets, expertise, and R&D capabilities, we intend to drive expansion, accelerate innovation, and deliver greater value to our clients and partners.”

Business Details and Schedule

This combined company will be headquartered in Toulouse, France and have a workforce of about 25,000 employees. The entity is planned to be operational in 2027, following regulatory approvals. According to the partners, it is expected to generate “mid-triple digit” euros in millions in cost savings on annual profit each year, starting after a five-year period.

Background and Reasons

Reports suggest that discussions between Airbus, Leonardo, and Thales began last year. The move aims to mirror the model of MBDA, which is owned by Airbus, Leonardo, and BAE Systems.

Although substantial job cuts in their space-related divisions in recent years, the firms stated that there would be no immediate facility shutdowns or layoffs. However, they noted that labor representatives would be consulted during the project.

Past Struggles in Space Business

These companies have faced setbacks in their space operations recently. Last year, Airbus incurred 1.3 billion euros in losses from unprofitable space projects and announced 2,000 redundancies in its defense and space sector. Similarly, the Thales Alenia Space joint venture, which is a collaboration of Thales and Leonardo, cut more than 1,000 positions last year.

Global Competitive Environment

Meanwhile, Elon Musk's SpaceX, founded in 2002, has grown to emerge as one of the largest startups worldwide, with a market value of {$$400bn. It leads both the space launch and satellite internet sectors. Its primary competitors include other US companies such as United Launch Alliance, a partnership of Boeing and Lockheed Martin, and Blue Origin, created by tech billionaire Jeff Bezos.

Earlier this month, the company launched its eleventh Starship rocket from Texas, USA, touching down in the Indian Ocean. Earlier in August, US President Donald Trump signed an executive order to simplify rocket launches, easing rules for private space operators.