Airbus, Leonardo, Thales to Join Forces in Bid to Compete With Musk's SpaceX — 2nd Update

By Cristina Gallardo and Sarah Sloat

European aerospace and defense giants Airbus, Leonardo and Thales plan to pool their space activities into a new company to better compete with Elon Musk's SpaceX and provide the continent with more strategic autonomy in space.

The holding company--combining the trio's satellite and space systems manufacturing as well as space services--will have an annual turnover of about 6.5 billion euros ($7.55 billion), the companies said Thursday.

Executives from Airbus, Italy's Leonardo and France's Thales told reporters that the new company will face intense competition, but that it wasn't too late for its creation, with demand for space services and infrastructure in Europe expected to increase over the coming years.

The as-yet unnamed company will be headquartered in the southern French city and space hub of Toulouse, and employ around 25,000 people distributed across teams in Germany, France, Italy, Spain and the U.K., in a bid to operate as a truly pan-European business, a Thales executive said.

The company is expected to be operational in 2027, subject to obtaining the antitrust green-light from the EU. The partner companies expect this process to be lengthy and difficult, despite having already engaged in early talks with the regulatory authorities, the Thales executive added.

The move is the result of more than a year of talks to iron out differences over ownership, workload and antitrust regulations, among other things.

The tie-up comes as Europe seeks to promote its sovereignty in space, a rapidly growing market featuring global players such as U.S. aerospace companies Lockheed Martin, Boeing and Musk's SpaceX, and emerging competitors such as German satellite maker OHB and Belgian peer Aerospacelab.

The European Union is taking steps to decrease its reliance on SpaceX, which provides launches and satellite services. The 27-strong bloc has floated plans for its own internet satellite constellation called IRIS2, expected to become operational by the end of this decade, with Airbus already taking part in its manufacturing.

The trio expects to boost the profitability of their space businesses by bringing their space assets together, but didn't say whether they foresee job cuts as a result. Airbus's Defence and Space division, which posted a loss of 566 million euros last year, in December announced a plan to cut 2,000 jobs.

Airbus will own a 35% stake in the venture, while aerospace and defense companies Leonardo and Thales will each hold 32.5%. The companies will have equal control, despite Airbus's space business contributing around half of the new venture's combined turnover. An Airbus executive declined to comment on the compensation the European planemaker might receive for its proportionally lower share in the new company.

Once the establishment of the new company is complete, it will include Airbus's Space Systems and Space Digital businesses, currently held under its defense and space division, as well as Leonardo's space business, including its shares in the Telespazio and Thales Alenia Space joint ventures. Thales will contribute with its shares in Thales Alenia Space, Telespazio and Thales SESO.

The MBDA joint-venture for the manufacturing of missiles, an example of successful European collaboration, offered an appropriate template for the creation of the new space company, the Thales executive said.

Under the model, the holding company will bring together three strong partners while preserving the capability of their respective countries to run sovereign programs, he said.

"The governance is tricky because space is, of course, a very sovereign sector," he said. "But at the same time the point of merging is to create synergies and to create the critical mass to carry large projects together."

Write to Cristina Gallardo at cristina.gallardo@wsj.com and Sarah Sloat at sarah.sloat@wsj.com

(END) Dow Jones Newswires

October 23, 2025 06:27 ET (10:27 GMT)