Leaders in European aerospace are working together to establish a €6.5 billion space company with the goal of developing innovation and competing with SpaceX.

Airbus, Leonardo, and Thales decided to combine their space businesses to create a more powerful European competitor in a field that has been shaken by Elon Musk's SpaceX.  The contracts have huge benefits and improve the combined businesses' competitiveness worldwide. The businesses signed a memorandum of intention to establish a fresh entity that will cut mid-triple-digit millions of euros in costs within five years after closing. Additionally, they expect additional operational savings in the future.

SpaceX's rapidly growing Starlink communications network in low Earth orbit has increased demand for satellites. Businesses in satellite manufacturing, space systems, elements, and services will be combined into a new company. It will take around €6.5 billion a year and employ around 25,000 people. The business also maintains an order backlog that beats revenues for over three years.

The CEOs of the three businesses described the combination as an important turning point for the European space industry. Also, they stated that by combining the assets, skills, and R&D capability, they aim to improve growth, increase innovation, and provide greater value to their stakeholders and clients.

A combined 32.5% of the company's shares will be owned by the three biggest businesses: Thales, Leonardo, and Airbus. The new entity expects to start operations by 2027, according to the businesses. The tasks will be combined through agreements with unions.  Currently, no job losses or site closures are expected. According to individuals who commented to the Financial Times, such layoffs might not be avoided in the future.