European aerospace giants have announced a landmark agreement to merge their struggling satellite manufacturing divisions, joining forces to challenge the rapid rise of competitors such as Elon Musk’s Starlink.
Under the preliminary deal unveiled on Thursday, Airbus, Thales, and Leonardo will form a new joint venture expected to launch in 2027, pending approval from European regulators who have previously resisted such mergers.
The new entity—yet to be named—will employ around 25,000 people across Europe and generate approximately €6.5 billion ($7.58 billion) in annual revenue, based on 2024 figures, the companies said in a joint statement.
Ownership will be split with Airbus holding 35%, and Thales and Leonardo each holding 32.5%, with a “balanced governance structure” ensuring joint control.
The alliance is projected to deliver hundreds of millions of euros in annual operating synergies within five years of formation.
Codenamed “Project Bromo,” discussions among the three firms began last year, inspired by the cooperative framework of MBDA, Europe’s leading missile manufacturer jointly owned by Airbus, Leonardo, and BAE Systems.
The move comes as Europe’s traditional satellite makers—long focused on building complex geostationary spacecraft—struggle to compete with the new generation of smaller, low-cost satellites in low Earth orbit.
In a joint statement, the CEOs said the merger would strengthen Europe’s strategic autonomy in space, a key priority for regional governments.
The new company will bring together Thales Alenia Space and Telespazio—existing joint ventures between Thales and Leonardo—along with various Airbus space and digital units, and the remaining space operations of both Thales and Leonardo.
Although the three firms have already cut around 3,000 jobs in their space divisions, they did not indicate any new layoffs, stating instead that labor unions would be consulted.
The agreement follows months of negotiations that nearly collapsed over governance and valuation disputes during the summer, according to sources cited by Reuters.
