European aerospace groups have unveiled an initial agreement to merge their loss-making satellite manufacturing businesses, joining forces after months of talks to counter the uncontrollable growth of rivals led by Elon Musk's Starlink, Reuters reports.
The long-awaited deal between Airbus, Thales and Leonardo aims to create a new entity from 2027, subject to approval by European regulators who have resisted such moves in the past.
The unnamed new entity will employ 25,000 people across Europe with annual revenue of 6.5 billion euros, based on data for 2024.
Airbus will hold 35%, while Thales and Leonardo will each hold 32.5% of the venture, which will operate under joint control "with a balanced management structure".
The companies expect the space partnership to generate "mid-triple-digit" million euros in operating income synergies per year, starting in five years.
Talks between the three aerospace groups, codenamed "Project Bromo", began last year in an attempt to replicate the collaboration model of European rocket maker MBDA, owned by Airbus, Leonardo and BAE Systems.
The leading European satellite manufacturers have long competed in building sophisticated spacecraft in geostationary orbit, but have been hit by the emergence of cheap small satellites in low-Earth orbit.
The CEOs of the three companies said in a joint statement that the merger would help governments ensure "Europe's autonomy in the strategic space domain".
The deal will bring together the manufacturing and service activities of Thales Alenia Space and Telespazio - two joint ventures between Leonardo and Thales - as well as various space and digital businesses of Airbus, such as the remaining space activities are owned by Leonardo and Thales SESO.
The companies, which have already cut a total of around 3,000 space jobs, did not mention further cuts but said unions would be consulted on the project.
Earlier this week, it was reported that the three aerospace groups had reached a framework agreement for a proposed merger of their satellite businesses.
The deal between the three companies - each of which has had periods of strained relations in the past - was salvaged, although negotiations hit hurdles over governance and valuation over the summer.