A proposed €6.5 billion merger between the space divisions of Airbus, Leonardo, and Thales is encountering resistance from some competitors, who have raised concerns about market competition.
Marco Fuchs, CEO of German satellite manufacturer OHB, expressed apprehension that the deal could impact the consortia formed by European companies to bid for projects from the European Union and the European Space Agency.
According to two informed sources, Indra Espacio, a subsidiary of Spain's Indra Sistemas, also opposes the merger.
In response, Thales and Leonardo stated that the project targets the global market—currently dominated by vertically integrated, state-backed industry giants—and that the combination of strengths aims to create a European champion capable of competing with them by 2030. Airbus declined to comment on the concerns.
These objections suggest that the proposed space merger between Airbus, Leonardo, and Thales may face hurdles in subsequent regulatory processes. EU regulators have previously blocked major deals intended to create European industry leaders on antitrust grounds, such as the proposed mergers between Siemens and Alstom's rail businesses, and the steelmaking operations of Tata Steel and ThyssenKrupp.
Airbus, Leonardo, and Thales announced last October that they had reached a preliminary agreement to merge their satellite and space systems manufacturing businesses, forming a company valued at €6.5 billion (approximately $7.56 billion). The goal is to create a European aerospace giant capable of competing with Elon Musk's SpaceX.
The project, currently codenamed "Bromo," requires antitrust approval from the European Commission, the EU's executive body, with the earliest outcome expected no sooner than 2027. According to one source, the partners are expected to submit their merger application to the European Commission in the coming weeks.
Some European aerospace companies not involved in the project believe the move will weaken competition within Europe. This comes as demand for satellites on the continent is rising, driven by the war in Ukraine and Europe's pursuit of strategic autonomy amid concerns over US security commitments.
"Institutional markets in Europe are seeing increased demand, particularly for military projects, and at such a time, consolidation on the supply side is, in my view, inappropriate," Fuchs said in an interview.
The core disagreement lies in whether the project, as the partners claim, aims for the global market, or whether, as critics argue, it will remain confined to Europe.
OHB works closely with Thales Alenia Space, one of the businesses slated to be merged into the new company. Fuchs of OHB indicated that once the merger is completed, the joint venture between Thales and Leonardo might be less willing to collaborate with OHB.
"Such a merger will clearly influence partnership choices and bidding strategies," Fuchs stated. "All parties will present their legal arguments during the European Commission's antitrust proceedings."
The European Commission has proposed a fivefold increase in the EU's defense, space, and security budget for 2028-2034, bringing the total to €131 billion.
According to sources, Indra Espacio, which recently acquired Spanish satellite operator Hispasat, is concerned that the Bromo project will ultimately focus on Europe because it cannot effectively compete in markets like the US or China, where domestic companies are often prioritized.
Thales and Leonardo stated that the new company formed by the Bromo project will focus on strengthening the European space industrial base and its domestic supply chain.
The companies added, "As we advance the new company project and gradually achieve our objectives, new opportunities for collaboration with other players within the European ecosystem may naturally arise in the future."