Europe’s space giants unite to counter rising dominance of SpaceX

Three of Europe’s largest aerospace companies have agreed to merge their space divisions into a joint venture aimed at strengthening Europe’s position in the global space market and, in particular, competing with US rivals like Elon Musk’s SpaceX.

After months of negotiations, industry giants Airbus, Leonardo, and Thales signed a memorandum of understanding to establish a new company that will have the “critical mass to compete globally” by 2027, according to a joint statement released on October 23.

The companies said the joint venture will help consolidate Europe’s fragmented space sector and bolster its “strategic autonomy” in satellite telecommunications. The move aligns with the European Union’s ambitions to reduce reliance on foreign technologies through initiatives such as IRIS², a next-generation satellite communications project designed to serve as a local alternative to SpaceX’s Starlink network.

“This proposed new company marks a pivotal milestone for Europe’s space industry. It embodies our shared vision to build a stronger and more competitive European presence in an increasingly dynamic global space market,” Airbus CEO Guillaume Faury, Leonardo CEO Roberto Cingolani, and Thales Chairman and CEO Patrice Caine said in a joint statement.

Internally dubbed *Project Bromo*, the joint venture has been under discussion for over a year. The companies hope to combine their respective strengths in satellite manufacturing, space systems, and related services to achieve the scale and efficiency needed to compete globally.

“In Europe, if we step back, there is a lot of fragmentation in terms of projects, fragmentation in terms of players as well,” Alain Fauré, head of space systems at Airbus Defence and Space, said during the Paris Air Show in June. A merger, he added, “can have the strengths of the three companies.”

According to the press announcement, the joint venture is expected to begin operations in 2027, pending “customary conditions including regulatory clearances.” Executives anticipate that European antitrust reviews could take up to two years.

“Europe has realised that its sovereignty […] and security depends on space,” a Thales executive said during a press briefing. “We can create a company that will be capable of delivering this capability extremely efficiently.”

The planned merger comes amid growing pressure on European space firms from SpaceX, whose Starlink constellation has rapidly expanded to dominate the low-Earth orbit (LEO) communications market. The joint venture aims to help Europe respond to this shift by scaling production, accelerating innovation, and cutting costs.

Historically, European companies like Airbus and Thales Alenia Space — a joint venture between Thales and Leonardo — have been global leaders in manufacturing large geostationary satellites used for television broadcasting and telecommunications services, as reported by Financial Times. However, this market segment has been shrinking in recent years, and both firms have struggled to adapt quickly to the surge in demand for smaller, cheaper satellites operating in LEO.

The rise of Starlink has intensified competition, forcing European companies to restructure their operations and lay off workers. These challenges reignited discussions about consolidation, an idea that had surfaced periodically since at least 2019.

The three firms plan to model the new space entity on MBDA, Europe’s missile manufacturer formed in 2001 through a merger of Airbus, the UK’s BAE Systems, and Italy’s Leonardo. Like MBDA, the new company would pool resources and technological expertise to create a unified European industrial “champion.”

If approved by EU competition authorities, the new venture would have annual revenues of approximately €6.5 billion and employ around 25,000 people across Europe. Under the proposed share distribution, Airbus would hold 35% of the company, while Leonardo and Thales would each own 32.5%.

Executives say the merger will not only consolidate resources but also help ensure Europe retains technological independence and industrial capacity in a rapidly evolving global space economy.

By Nazrin Sadigova