Thales, Airbus and Leonardo Move Closer to €10 Billion Satellite Venture
Leonardo, Thales and Airbus are working to finalise an initial agreement on a €10 billion joint venture to merge their satellite operations. The proposed partnership, known as “Project Bromo”, aims to create a European satellite manufacturing powerhouse. According to sources familiar with the matter, the companies are seeking to counter growing competition from the US and China, especially from players like Elon Musk’s Starlink.
The new venture would be headquartered in France and could be modelled after MBDA, the European missile manufacturer jointly owned by Airbus, Leonardo and BAE Systems. Sources suggest a memorandum of understanding may be signed before the end of September. However, delays remain possible.
Renewed Focus After Previous Setbacks
Negotiations had stalled during the summer due to disagreements over valuation and governance. At one point, discussions nearly collapsed. Despite those setbacks, momentum has returned, and progress has resumed.
One key challenge is finalising the structure of ownership and management. The companies are still negotiating how the venture will be divided, though it may be split equally among the three. Political backing has been positive so far, but formal approval from governments is still required.
The joint venture will likely include separate national entities to safeguard sensitive defence-related assets. This approach mirrors MBDA’s structure, which balances cross-border collaboration with national security concerns.
Strategic Importance in a Shifting Market
The satellite sector is experiencing rapid change, driven by the rise of low-earth orbit technology and lower-cost solutions. Starlink’s growth has increased pressure on European firms to consolidate and compete more effectively.
European policymakers have also pushed for stronger sovereign capabilities in response to rising geopolitical tensions and evolving US policies. With all three companies having state shareholders, political considerations remain a major factor in any final agreement.
Airbus CEO Guillaume Faury confirmed earlier this week that talks are ongoing with governments and stakeholders. “We are on the way,” he said, noting that anti-trust discussions had already begun.
Thales has confirmed that no final agreement has been reached yet. “We are continuing our work. Any further comment would be premature,” a spokesperson said.
Future of the Venture Still Taking Shape
If successful, the deal would combine satellite units with annual revenues totalling between €6 billion and €6.5 billion. Industry benchmarks suggest this supports the joint venture’s estimated €10 billion valuation. The final location is likely to be Toulouse, where Airbus is headquartered, although details remain under discussion.
Previous efforts to form a similar European satellite entity failed due to regulatory concerns and national rivalries. This time, however, growing market pressure may help overcome past barriers.
with inputs from Reuters
