Airbus, Thales, Leonardo announce space merger to rival Musk’s Starlink

Airbus, Leonardo And Thales announced on Thursday that it would combine its satellite and space activities to create a “leading European player in space”, as the region seeks a homegrown rival to Elon Musk’s Starlink.

The companies – each a heavyweight in their own right in the aerospace and defense sectors – said the joint venture would develop and build, “a broad portfolio of complementary technologies and end-to-end solutions, from space infrastructure to services.” The development of space launchers will be excluded from the new company’s operations.

The combined entity is expected to generate mid-triple-digit million euros in annual synergies on operating income within five years of closing and will employ 25,000 people across Europe.

European defense stocks jumped on Thursday, with regional stocks the Aerospace and Defense Index adding 0.9%. Leonardo shares were last seen trading up 1.8%, while Thales gained 0.6% and Airbus gained 0.2%.

Airbus will be the majority owner of the new joint venture with a 35% stake and will contribute its Space Systems and Space Digital businesses from its Defense and Space divisions. Leonardo and Thales will each hold a 32.5% stake in the new company.

Leonardo’s contribution will be the entire space division, including stakes in Rome-based spaceflight services firm Telespazio and Thales Alenia Space, an existing joint venture with Thales. Thales will also add its stake in Thales Alenia Space as well as its Thales SESO operations to the new company.

The companies said the new space agency would be “an integrated, integrated and flexible European space player, with critical mass to compete globally and grow in export markets.”

“This new company intends to serve as a trusted partner in the development and implementation of the national sovereign space program,” he added.

The companies’ chief executives said in a joint statement that the joint venture would be “an important milestone for Europe’s space industry”. “Build a stronger and more competitive European presence in an increasingly dynamic global space market.”

He stressed that the move would allow Europe as regional governments to control domestic space operations Look for cash to pour in in their aerospace and defense capabilities.

Starlink has played an important role Ukraine’s war effort, however, has had problems since Russia launched a full-scale invasion of the country in 2022 allegedly originated in the past With a communication blackout. Earlier this year, they There was a rumor Eutelsat — a French firm set to merge with Britain’s OneWeb in 2023 — was in the running to replace Starlink in Ukraine.

Meanwhile, French President Emmanuel Macron has backed the concept of a European satellite champion. Argue in speech In the summer that “space has somehow become a measure of international power.” Meanwhile, Italian MPs warned Against including SpaceX in an update to the country’s satellite program in July.

Speculation has been building for some time that Airbus, Leonardo and Thales will join forces on satellite missions. Back in AprilLeonardo CEO Roberto Cingolani told CNBC that the alliance is expected to be completed in the coming months.

He said at the time that the joint venture would not be designed specifically to challenge Starlink, but to provide a European alternative.

Eutelsat has long sought to become a regional rival to Musk’s company. However, its fleet of satellites is largely occupied by Starlink, with subsequent launches 10,000 of it^Th The satellite will go into orbit early this week.

David Barker, investment manager for GAM’s European equities team, told CNBC that the joint venture announced Thursday is “the first concrete evidence that Europe is addressing its declining technological sovereignty since the start of the second Trump administration.”

“(Previously), Europe was competing with itself through three subscale companies against the growing dominance of SpaceX,” he said. “We see this as a positive step towards re-establishing Europe’s space industry as a global power and also a positive signal that the European project can reassert itself where it has failed in other areas such as cross-border banking, capital markets and defense integration.”

Meanwhile, Michael Field, chief equity strategist at Morningstar, told CNBC that the move was “another step in the right direction for Europe.”

“For Leonardo, Thales and Airbus, space is a relatively small part of their business, but joining forces certainly provides more leverage to compete in the global market,” he said. “We are bullish on the aerospace and defense sector in general, with four-star ratings on both Thales and Leonardo.”

— CNBC’s Ryan Brown and Sylvia Amaro contributed to this report.