European space push: Airbus, Leonardo, Thales join forces in €6.5 bn deal

Airbus, Leonardo and Thales will merge space businesses, creating a €6.5 billion company with 25,000 employees and cost savings of mid-triple-digit millions

Airbus, Leonardo and Thales have agreed to merge their space businesses in a move aimed at creating a stronger European competitor in a market shaken by Elon Musk’s SpaceX. The three companies said the deal would generate “significant synergies” and make the combined group more competitive globally, the Financial Times reported.

 

The firms signed a memorandum of understanding to create a new company that could deliver cost savings of “mid-triple-digit millions” of euros in operating income within five years of closing. They also anticipate further operational savings over the long term.

 

Europe has struggled to keep pace with the surge in satellite demand triggered by SpaceX’s rapidly growing Starlink communications network in low Earth orbit. By merging their space operations, the companies aim to form a more agile and efficient group capable of adapting to these market shifts, the news report said.   

 

Scope and scale of the new company

 

The new entity will bring together businesses in satellite manufacturing, space systems, components and services. It will employ around 25,000 people and generate annual revenues of roughly €6.5 billion. The company also boasts an order backlog covering more than three years of projected sales.

 

Ownership will be shared among the three parent companies, with Airbus holding 35 per cent, while Leonardo and Thales will each own 32.5 per cent. Details of the governance structure will be announced later.

 

The deal still requires regulatory approval. The companies expect the new entity to begin operations by 2027. Negotiations with unions will follow to merge the operations, and no immediate site closures or job losses are expected. However, insiders have told the Financial Times that job cuts may be unavoidable in the longer term.

 

Airbus CEO Guillaume Faury, Leonardo CEO Roberto Cingolani and Thales CEO Patrice Caine described the merger as “a pivotal milestone for Europe’s space industry".

 

They added, “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.”