Three of Europe’s largest aerospace and defense companies—Airbus, Leonardo, and Thales—are collaborating to reshape the continent’s space industry. On Thursday, the companies signed a memorandum of understanding to merge their space operations into a new joint venture. This merger requires regulatory approval and will encompass much of Europe’s satellite, communications, and Earth-observation capabilities.
The new company will integrate Airbus’s Space Systems and Space Digital businesses, Leonardo’s Space Division, which includes its holdings in Telespazio and Thales Alenia Space, and Thales’s interests in Thales Alenia Space, Telespazio, and Thales SESO. According to pro forma 2024 figures, the venture is expected to employ around 25,000 people, generate approximately €6.5 billion in annual revenue, and carry an order backlog covering more than three years of projected sales. Ownership of the joint venture will be divided, with Airbus holding 35 percent and both Leonardo and Thales holding 32.5 percent each, creating a balanced governance structure under joint control.
The companies anticipate that this merger could yield mid-triple-digit million-euro annual synergies within five years, primarily through operational efficiencies in engineering, manufacturing, and project management. Focusing on end-to-end space infrastructure and services, the merger will not include launch vehicles and is expected to become operational in 2027, pending employee consultations and regulatory approvals.
This joint venture marks a significant advancement in consolidating Europe’s fragmented space industry. By aligning three well-established aerospace and defense leaders, the new entity aims to achieve the necessary scale and expertise to compete more effectively against global competitors such as SpaceX, Northrop Grumman, and Lockheed Martin. Furthermore, the merger aligns with Europe’s broader objective of strategic autonomy, aiming to reduce reliance on non-European technologies for essential capabilities like secure satellite communications, navigation, and defense intelligence.
One notable absence from this consolidation is OHB, a German aerospace company renowned for its satellite development and its preference for independence amidst the industry’s consolidation trends. OHB is leading the consortium for the planned Odin’s Eye missile warning system, which is a critical component of Europe’s future space-based defense architecture. This positions OHB as both a competitor and potential collaborator within the evolving European space landscape.
The merger will significantly impact several key European space programs:
1. **Navigation**: The new entity could take a leading role in developing, manufacturing, and sustaining Europe’s global and regional navigation systems—Galileo and EGNOS.
2. **Earth Observation**: It is anticipated that the venture will become a principal contractor for Copernicus programs, providing comprehensive satellite and service solutions.
3. **Defense and Secure Communications**: The consolidation of military space assets will impact government programs such as GOVSATCOM and next-generation secure networks like IRIS².
4. **National Military Satellites**: Programs like France’s Syracuse, Italy’s SICRAL, and the UK’s Skynet may benefit from collaborative technology development and cost efficiencies facilitated by the merger.
5. **Satellite Operations and Data Services**: With stakes in companies such as Telespazio, the new venture will be positioned to influence both commercial and public satellite operations and downstream data services.
