The deal — described as the most ambitious European aerospace alliance since the creation of missile maker MBDA in 2001 — is aimed at countering the rapid expansion of Elon Musk’s Starlink and other U.S.-led commercial space ventures that have upended the global satellite market.
French Finance Minister Roland Lescure hailed the move as a strategic milestone, saying it would “strengthen European sovereignty in a context of intense global competition.”
Building a European Space Champion
The proposed venture, informally known as “Project Bromo,” will employ about 25,000 people and generate €6.5 billion ($7.6 billion) in annual revenue based on 2024 figures. The companies expect to unlock “mid-triple digit” millions of euros in synergies within five years of operations, though details remain undisclosed.
Under the agreement, Airbus will hold a 35% stake, while Thales and Leonardo will each own 32.5%, with joint control through a balanced governance structure. Industry sources say Airbus will receive compensation payments to reflect the relative value of its contributions when the transaction formally closes in 2027.
The consolidation will bring together Thales Alenia Space and Telespazio — joint ventures between Thales and Leonardo — alongside Airbus’s space and digital units, plus remaining space assets owned by Leonardo and Thales SESO.
Navigating Regulatory and Political Terrain
Before becoming operational, the new entity faces up to two years of discussions with European governments, labor unions, and regulators, including the European Commission. The negotiations will address potential impacts in Britain, Germany, Italy, and France, where the partners currently operate key facilities.
Although the companies have already cut a combined 3,000 jobs in their space divisions, executives indicated that the merger would prioritize growth and competitiveness rather than further downsizing.
A Response to Starlink’s Dominance
European satellite manufacturers have struggled in recent years against low-cost, high-volume satellite constellations such as SpaceX’s Starlink, which has rapidly deployed thousands of small satellites into low Earth orbit. The new European alliance is expected to pool resources, accelerate innovation, and create a single industrial champion capable of competing globally.
Shares in Thales and Leonardo climbed more than 2% after the announcement, while Airbus edged slightly higher in early Thursday trading.
Italian investment bank Equita described the agreement as a “positive and necessary step”, noting that it “creates a European leader capable of competing globally and improves the profitability of a business that has struggled in recent years.”
Challenges Ahead
Thales Chief Financial Officer Pascal Bouchiat welcomed the partnership but acknowledged persistent headwinds in the satellite sector.
“Telecoms activity in space remains under pressure, that’s clear,” he said, referring to the company’s new contract for the European IRIS² satellite network. “The fact that we had this first development contract doesn’t take away the challenges the European industry is facing.”
The path to Thursday’s announcement was not smooth. According to insiders, talks had stalled over governance and valuation disputes during the summer but were revived after concessions on leadership structure. The companies also vowed to avoid the nationality-based appointments and rotating leadership systems that have previously caused friction within Airbus and other European aerospace ventures.
If completed, the deal would mark a transformative realignment of Europe’s space sector, signaling the continent’s determination to remain a competitive force in the new commercial space race.