Airbus, Thales, And Leonardo Agree To Combine Satellite Business Against Starlink

Three giant aerospaces Europe, Airbus, Thales, and Leonardo, combine satellite divisions (photo; x@AirbusPRESS)

JAKARTA Three aerospace giants Europe, Airbus, Thales, and Leonardo, finally reached an initial agreement to merge their satellite manufacturing division that has been losing money. This big step was taken after months of intense negotiations to deal with the global dominance of Elon Musk's satellite network, Starlink.

The agreement was announced Thursday, October 23 local time and marks Europe's latest efforts to maintain independence in the space sector, which has been eroded by the fast innovations of US companies.

The new entity from the merger, which has not been named will start operating in 2027, after obtaining approval from EU regulators known to be quite strict on the merger of large businesses.

According to a joint statement, the combined company will employ about 25,000 people across Europe with a proforma revenue of 6.5 billion euros (approximately 7.58 billion US dollars) based on 2024 data. The Airbus will own 35 percent of the shares, while Thales and Leonardo hold 32.5 percent each, with a balanced joint governance system.

This consolidation move is expected to be able to generate synergies worth hundreds of millions of euros' per year on operating profit after five years of running. The project is codenamed Project Bromo, and is said to be emulating a successful collaborative model of European missile manufacturer MBDA, which is jointly owned by Airbus, Leonardo, and BAE Systems.

In a joint statement, the CEOs of the three companies confirmed that this merger would help the European government maintain a strategic autonomi' in the space sector.

This agreement includes the merger of manufacturing and service lines from Thales Alenia Space and Telespazio two joint ventures between Leonardo and Thales together with Airbus' digital and space divisions as well as other space activities belonging to Leonardo and Thales SESO.

Although the three companies have cut about 3,000 jobs in the space sector over the past few years, they insist there are no additional plans for termination of employment in this deal. The union will remain involved in the project consulting process.

Talks between Airbus, Thales, and Leonardo had experienced a stalemate in the summer due to different views on valuation and governance structure, before finally reaching a compromise that saved the deal.

With this merger, Europe hopes to re-strengthen its position in the global race of the satellite industry, especially facing pressure from the cheap constellation of satellites in low-Earth orbit like Starlink.