Three of the biggest European space companies partner to compete with Elon Musk's Starlink

A trio of Europe’s aerospace giants are merging their space businesses to create a regional unit capable of competing with Elon Musk-owned SpaceX ’s Starlink satellite cluster. Airbus , Leonardo and Thales have announced that they have signed a memorandum of understanding to combine their space operations, promising "significant synergies" and cost savings in the "mid-triple-digit millions" of euros in operating income within five years of the merger's completion.

According to a report by The Financial Times, this move comes as European space companies struggle to respond to market shifts driven by SpaceX's rapid expansion of its Starlink communications satellite constellation in low Earth orbit (LEO).

By consolidating their space divisions, the three European aerospace leaders aim to create a more efficient organisation better equipped to navigate the transformed market landscape.

A new European space giant to compete with SpaceX
The combined entity will encompass satellite manufacturing, space systems, components and services, employing approximately 25,000 people worldwide. The new company will reportedly generate annual revenue of around 6.5 billion euros.

When it comes to ownership, it will be distributed among the parent companies, with Airbus holding 35%, while Leonardo and Thales each control 32.5% stakes. The governance structure for the joint venture will be announced at a later date.

Regulatory approval and timeline
The merger still requires regulatory clearance from competition authorities. The companies expect the new entity to become operational by 2027, assuming approvals proceed smoothly. Negotiations with labor unions will now commence to merge the operations.

Guillaume Faury, chief executive of Airbus, Roberto Cingolani, chief executive of Leonardo, and Patrice Caine, chief executive of Thales, issued a joint statement calling the creation of the new European space champion "a pivotal milestone for Europe's space industry."

“By pooling our talent, resources, expertise and R&D capabilities, we aim to generate growth, accelerate innovation and deliver greater value to our customers and stakeholders,” the executives said.