Major EU Aerospace Companies Join Forces to Establish Rival to Musk's SpaceX

A trio of prominent EU-based space technology companies—the Airbus Group, Leonardo, and Thales—have now finalized a strategic deal to combine their space operations. This collaboration aims to form a unified pan-European technology enterprise capable of rivaling with Elon Musk's SpaceX.

Economic Aspects and Ownership Breakdown

This newly formed entity is projected to generate yearly revenue of approximately 6.5 billion euros (£5.6bn). As per the arrangement, Airbus will control a 35% stake in the venture. At the same time, both Leonardo and France's Thales will each retain 32.5% ownership.

Scope and Goals of the New Enterprise

The yet-to-be-named merger represents one of the largest partnerships of its type across the European continent. It will unite various capabilities in building satellites, spacecraft systems, parts, and services from top aerospace and defence producers.

Guillaume Faury, Leonardo's chief executive, and Thales's CEO jointly declared, “The joint venture marks a crucial milestone for the European space sector.” The executives added, “By combining our talent, resources, expertise, and R&D capabilities, we intend to drive expansion, accelerate progress, and provide greater benefits to our customers and partners.”

Operational Details and Schedule

This combined company will be based in Toulouse and employ about 25,000 employees. It is planned to become fully functional in 2027, following regulatory approvals. According to the partners, it is expected to generate “mid-triple digit” millions of euros in cost savings on operating income per year, starting following a five-year period.

Background and Motivation

Reports indicate that discussions between Airbus, Leonardo, and Thales began the previous year. The move seeks to replicate the structure of MBDA, which is owned by Airbus, Leonardo, and BAE Systems.

Although significant workforce reductions in their space-related units in recent years, the companies stated that there would be no immediate facility shutdowns or job losses. Nonetheless, they noted that labor representatives would be consulted throughout the project.

Recent Struggles in Space Business

The firms have encountered setbacks in their space ventures recently. The previous year, Airbus recorded €1.3bn in charges from underperforming space contracts and announced 2,000 redundancies in its defense and space division. Similarly, the Thales Alenia Space joint venture, a partnership between Thales and Leonardo, cut more than 1,000 jobs the previous year.

Worldwide Competitive Environment

Meanwhile, the SpaceX, founded in 2002, has grown to become one of the biggest private companies worldwide, with a market value of {$400 billion dollars. SpaceX dominates both the rocket launch and satellite-based internet sectors. Its main rivals are other American firms such as United Launch Alliance, a joint venture between Boeing and Lockheed Martin, and Blue Origin, created by tech billionaire Jeff Bezos.

Just this month, the company successfully flew its eleventh Starship from Texas, landing in the Indian Ocean. In August, American President Donald Trump approved an executive order to streamline space launches, relaxing regulations for commercial space operators.