Three of Europe’s largest aerospace and defense companies are joining forces to reshape the continent’s space industry. Airbus, Leonardo, and Thales have signed a memorandum of understanding to merge their space operations into a new joint venture that will unify much of Europe’s satellite, communications, and Earth-observation capabilities under one organization.
The new company will bring together Airbus’s Space Systems and Space Digital businesses, Leonardo’s Space Division—including its holdings in Telespazio and Thales Alenia Space—and Thales’s stakes in Thales Alenia Space, Telespazio, and Thales SESO. Based on pro‑forma 2024 figures, the venture will employ around 25,000 people, generate roughly €6.5 billion in annual revenue, and carry an order backlog covering more than three years of projected sales. Ownership will be split with Airbus holding 35% and Leonardo and Thales each holding 32.5%, with a balanced governance structure under joint control.
The companies anticipate the combination could generate mid‑triple‑digit million‑euro annual synergies within five years of closing, mainly through operational efficiencies in engineering, manufacturing, and project management. The merger will focus on end‑to‑end space infrastructure and services but will exclude launch vehicles. The venture is expected to be operational in 2027, subject to employee consultations and regulatory approvals.
Why This Consolidation Matters
The new joint venture represents a major step in consolidating Europe’s fragmented space industry. By unifying three established aerospace and defense leaders, the company aims to achieve the scale and expertise needed to compete more effectively with global players, including SpaceX, Northrop Grumman, and Lockheed Martin. The merger also aligns with Europe’s broader goal of strategic autonomy, reducing reliance on non-European technology for critical capabilities such as secure satellite communications, navigation, and defense intelligence.
Yet one notable absence from this consolidation is OHB, a German aerospace company with a strong track record in satellite development. This makes OHB a key outlier, continuing its independent trajectory amidst the consolidation trend. Despite not joining the new venture, the company continues to pursue its own initiatives, most prominently leading the consortium for the planned Odin’s Eye missile warning system—a key element of Europe’s future space-based defense architecture. This positions OHB as both a competitor and potential collaborator in the evolving European space landscape.
Potential Program Impacts
The merger is expected to influence several key European space programs:
- Navigation: The new entity could take a leading role in the development, manufacturing, and sustainment of Galileo and EGNOS, Europe’s global and regional navigation systems.
- Earth Observation: It is likely to become a principal contractor for Copernicus programs, providing end-to-end satellite and service solutions.
- Defense and Secure Communications: The consolidation of military space assets will affect government programs such as GOVSATCOM and next-generation secure networks like IRIS².
- National Military Satellites: Programs such as France’s Syracuse, Italy’s SICRAL, and the UK’s Skynet may benefit from shared technology development and cost efficiencies.
- Satellite Operations and Data Services: With significant stakes in companies like Telespazio, the new venture will be positioned to influence commercial and public satellite operations and downstream data services.
By combining industrial capabilities, technical expertise, and service networks, the joint venture aims to provide a more integrated, competitive, and resilient European space presence on both commercial and government fronts.
A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter. As the Internet grew in importance as a research tool, he helped design the company's Forecast Intelligence Center and currently coordinates the EMarket Alert newsletters for clients. Richard also manages social media efforts, including two new blogs: Defense & Security Monitor, covering defense systems and international issues, and Flight Plan, which focuses on commercial aviation and space systems. For over 30 years, Richard has authored the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed data on major aerospace and defense contractors. He also edits the International Contractors service, a database that tracks all the contractors involved in the programs covered in the FI library. More recently he was appointed Manager, Information Services Group (ISG), a new unit that encompasses developing outbound content for both Forecast International and Military Periscope.
Carter Palmer has long held a keen interest in military matters and aviation. As a FI's space systems analyst he is responsible for updating the reports and analyses within the Space Systems Forecast – Launch Vehicles & Manned Platforms and Space Systems Forecast – Satellites & Spacecraft products.
