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A trio of prominent EU-based space technology companies—Airbus, Leonardo S.p.A., and Thales—have now finalized a strategic agreement to merge their space businesses. This collaboration aims to form a unified pan-European tech company capable of rivaling with Elon Musk's SpaceX venture.

Financial Details and Ownership Structure

The newly formed company is expected to achieve yearly sales of around 6.5 billion euros (5.6 billion pounds). As per the arrangement, Airbus will control a 35% stake in the venture. Meanwhile, both Leonardo and Thales will respectively retain 32.5% shares.

Scope and Objectives of the Joint Enterprise

The yet-to-be-named merger constitutes one of the biggest consolidations of its type across the European continent. It will bring together diverse capabilities in building satellites, spacecraft systems, components, and support services from top aerospace and defence manufacturers.

The CEO of Airbus, Leonardo's chief executive, and Patrice Caine collectively declared, “This new company marks a pivotal milestone for Europe's space industry.” They continued, “By pooling our expertise, resources, knowledge, and research and development strengths, we intend to generate expansion, accelerate innovation, and provide greater value to our customers and stakeholders.”

Operational Details and Schedule

This combined company will be based in Toulouse, France and employ approximately 25,000 employees. It is scheduled to become fully functional in 2027, pending regulatory approvals. According to the partners, it is expected to yield “hundreds of” millions of euros in cost savings on annual profit per year, starting after a five-year timeframe.

Context and Reasons

Sources indicate that talks among Airbus, Leonardo, and Thales began last year. The move aims to mirror the structure of the European missile manufacturer MBDA, which is jointly held by Airbus, Leonardo, and BAE Systems.

Despite substantial workforce reductions in their space divisions in recent years, the companies stated that there would be no immediate facility shutdowns or layoffs. However, they noted that labor representatives would be consulted throughout the process.

Past Struggles in Space-Related Business

These companies have encountered difficulties in their space operations recently. The previous year, Airbus recorded €1.3bn in losses from unprofitable space contracts and revealed 2,000 redundancies in its defence and space sector. Similarly, the Thales Alenia Space joint venture, which is a partnership of Thales and Leonardo, eliminated more than 1,000 jobs last year.

Global Competitive Environment

Meanwhile, the SpaceX, established in 2002, has grown to become one of the biggest private companies globally, with a valuation of {$$400bn. SpaceX dominates both the rocket launch and satellite internet sectors. Its primary rivals include additional American companies such as United Launch Alliance, a joint venture between Boeing and Lockheed Martin, and Blue Origin, created by tech billionaire Jeff Bezos.

Earlier recently, the company successfully flew its eleventh Starship from Texas, USA, landing in the Indian Ocean. Earlier in August, American President Donald Trump approved an executive order to simplify rocket launches, easing rules for private space operators.