Three major European aerospace companies – Leonardo, Airbus Defence and Space, and Thales Alenia Space – are on the verge of a pivotal decision. By the end of July, they will determine whether to proceed with a plan to combine their space divisions, a move that could reshape the European space landscape. This potential merger, sometimes called Project Bromo, aims to create a stronger competitor to industry giants like SpaceX.
Roberto Cingolani, CEO of Leonardo, stated at a Paris Air Show press conference that the decision will hinge on several factors. These include an assessment of antitrust concerns, thorough due diligence of the companies’ finances, and a careful evaluation of the potential synergies. “By the end of July, we would like to have a global go/no-go about the feasibility of the initiative,” he said. “I like to say that one plus one plus one should be bigger than three, otherwise we don’t do it,” he added, emphasizing the importance of significant value creation.
The proposed merger draws inspiration from the creation of MBDA, a successful European missile manufacturer formed through a similar consolidation. “The governance can be slightly different because the products are different,” Cingolani noted. “Definitely, the inspiration comes from the MBDA model.” He revealed that 90 people are currently working on assessing the feasibility of the project, reviewing financial information and exploring technological synergies.
Guillaume Faury, CEO of Airbus, expressed optimism about the merger’s prospects earlier this year, highlighting the potential for increased scale and speed. Alain Fauré, head of space systems at Airbus Defence and Space, further emphasized the need for a “European champion” in the space sector to better compete globally. He pointed to the fragmentation within the European space industry as a key driver for consolidation.
However, the path to a merged entity is not without challenges. Antitrust approvals are expected to take around two years, according to both Cingolani and Fauré. Despite the optimism surrounding the potential benefits, the significant regulatory hurdles and complexities of integrating three large companies must be overcome for this ambitious project to succeed. “We have a couple of years waiting for the antitrust,” Cingolani confirmed, “to create the company.”