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Three of Europe’s top aerospace firms, Leonardo, Thales, and multinational Airbus, have agreed on a framework to merge their satellite businesses into a new joint venture worth about 10 billion euros ($11.7 billion), reported Reuters. The deal, expected to be finalized by the end of 2025, aims to create a unified European leader in satellite manufacturing and operations amid fierce global competition.
The venture will combine Airbus’s Defence and Space division, Thales Alenia Space (jointly owned by Thales and Leonardo), and Telespazio, which manages ground control and data services. Together, these units generate between 6 and 6.5 billion euros annually but have faced shrinking profit margins and rising costs due to intense competition from private and state-backed rivals.
The new structure, informally called Project Buomo, will be based in France and modeled after MBDA, the pan-European missile consortium that united industry players from multiple nations. Officials say the plan will strengthen Europe’s autonomy in space, allowing it to compete with the United States and China in both commercial and defense satellite markets.
Executives from all three firms describe the move as a necessary step to survive a rapidly changing market. Small, low-cost satellites launched in large constellations by firms like SpaceX have transformed the industry. SpaceX’s Starlink network, with over 6,000 satellites, has set new standards for speed and affordability, pressuring traditional manufacturers to adapt.
China’s growing space industry has also accelerated the race. The country’s launch providers have hit record numbers this year, offering low-cost rides to orbit. European officials say the merger will help counter that dominance by sharing costs, technology, and infrastructure.
Beyond commercial contracts, the merger could reshape how Europe contributes to major scientific missions. Instruments from Airbus and Thales Alenia Space already power spacecraft like ESA’s Euclid telescope, launched in 2024 to study dark matter. A stronger combined company could fast-track future projects, such as exoplanet hunters and next-generation Earth-observation satellites.
For defense, the alliance is expected to focus on secure communications, reconnaissance, and early-warning systems. Europe currently depends partly on U.S. and private satellite services. A unified effort could improve independence in surveillance and secure data transfer across borders.
The deal will face intense regulatory review, especially from France and Italy, which hold key stakes in Thales and Leonardo. The European Commission will examine competition concerns, given that the venture would control a large share of the regional satellite market.
Integrating more than 20,000 employees across multiple countries and corporate systems will also be difficult. Past attempts to merge European aerospace units have failed due to national interests and management disagreements. This time, leaders are promising a leaner structure to avoid duplication and inefficiency.
Michael Schoellhorn, head of Airbus Defence and Space, said in a recent statement that talks are “on the right track,” adding that a united approach is essential if Europe wants to keep pace with global rivals.
A stronger European satellite industry could have wide-reaching effects. Satellites track deforestation, monitor rising sea levels, and power navigation systems. More efficient production and collaboration could reduce costs for climate and communication programs while boosting Europe’s position in space exploration.
The merger represents a strategic shift toward cooperation over competition within Europe’s fragmented aerospace sector. If finalized, it will mark one of the continent’s largest industrial consolidations in recent years and a major step toward ensuring Europe remains visible in the fast-changing space economy.
