Defense giants Airbus, Thales, and Leonardo have announced a major space merger, aiming to challenge Elon Musk's Starlink. The move comes as Europe seeks a homegrown rival to SpaceX's dominant satellite broadband service. The companies will combine their satellite and space activities to form a 'leading European player in space', offering a comprehensive portfolio of technologies and solutions, excluding space launcher development. This merger is expected to generate significant annual synergies and create 25,000 jobs across Europe. European defense stocks surged on the news, with Leonardo, Thales, and Airbus shares all rising. Airbus will take the majority stake, contributing its Space Systems and Space Digital businesses. Leonardo and Thales will each hold a 32.5% stake, with Leonardo bringing its Space division and Thales adding its Thales Alenia Space and Thales SESO operation. The new entity aims to be a unified, integrated, and resilient European space player, capable of competing globally and growing in export markets. This merger is seen as a pivotal milestone for Europe's space industry, helping to retain control over domestic space operations and address the need for an alternative to Starlink. Starlink has been crucial in Ukraine's war effort but has faced communication issues. European leaders, including French President Macron, have supported the idea of a European satellite champion, emphasizing the importance of space as a gauge of international power. The merger was anticipated after Leonardo CEO Roberto Cingolani expressed hope for the alliance in April, stating it would provide a European alternative to Starlink, not specifically to challenge it. Eutelsat, a regional rival to SpaceX, has a smaller satellite fleet compared to Starlink, which recently launched its 10,000th satellite. Industry experts view this merger as a positive step towards re-establishing Europe's space industry as a global force and a sign of the European project's potential to regain strength in various sectors. Michael Field, chief equity strategist at Morningstar, praised the move, highlighting the increased clout it provides for Leonardo, Thales, and Airbus in the global market. The merger is seen as a significant development in Europe's efforts to address its waning technological sovereignty and compete with SpaceX's growing dominance.
