European space technology giants merge satellite manufacturing sector

Airbus, Thales and Leonardo have just signed a framework agreement to merge their satellite manufacturing divisions, aiming to establish a new joint venture from 2027 to increase competitiveness against Elon Musk's Starlink.

On October 23, three European aerospace corporations, Airbus, Thales and Leonardo, announced a framework agreement to merge their satellite manufacturing operations.

The decision to merge this loss-making business segment was made after months of negotiations to cope with the dizzying growth of competitors, led by American technology billionaire Elon Musk's Starlink company.

According to the preliminary agreement, the three European groups aim to establish a new joint venture from 2027, with plans to recruit 25,000 employees across Europe and achieve annual revenue of about 6.5 billion euros (equivalent to 7.58 billion USD).

Specifically, the deal will combine the manufacturing and service activities of Thales Alenia Space and Telespazio – two joint ventures between Leonardo and Thales – as well as several of Airbus's space and digital businesses, along with the remaining space units of Leonardo and Thales SESO.

Airbus is expected to hold a 35% stake in the new joint venture, while Thales and Leonardo will each hold 32.5%.

The companies estimate the merger will generate millions of euros in annual profits within five years of the joint venture being operational, but the creation of the new firm now depends on European regulators.

In a joint statement, the CEOs of Airbus, Thales and Leonardo said the merger would help Europe secure autonomy across the entire “strategic space domain.”

Dubbed “Project Bromo,” talks between the three aerospace groups began last year aimed at replicating the cooperation model of European missile maker MBDA – a multinational group owned by Airbus, Leonardo and BAE Systems.

Europe's leading satellite manufacturers have long competed to build sophisticated spacecraft that fly in geostationary orbit, but the emergence of cheap small satellites in low Earth orbit has upended the race.

This loss due to competition has previously forced three European corporations to cut a total of about 3,000 jobs in the space sector./.

(TTXVN/Vietnam+)

Source: https://www.vietnamplus.vn/cac-dai-gia-cong-nghe-vu-tru-chau-au-hop-nhat-mang-san-xuat-ve-tinh-post1072261.vnp