Rocket Lab’s proposed acquisition of the German laser communications firm Mynaric is under increased scrutiny as Europe intensifies its focus on domestic space and defense capabilities. The proposed acquisition is raising questions about how the U.S. company’s bid will align with the region’s evolving industrial policy, as the German government continues its review of the transaction.
Rocket Lab, based in Long Beach, California, announced in March its plans to acquire Mynaric, headquartered in Munich, for approximately $150 million. The deal is contingent upon approval from the German government under foreign direct investment (FDI) regulations. Mynaric specializes in developing laser communications terminals used for data transmission between satellites, a crucial technology for next-generation defense and commercial constellations.
Richard French, Rocket Lab’s vice president of business development, stated on Oct. 30 that the company is still awaiting the conclusion of Berlin’s review. “We obviously have been public that we intend to acquire Mynaric and that requires German foreign direct investment approval,” he said during a panel discussion at the MilSat Symposium. “This would be our first European base.”
Since the announcement of the deal, Europe’s strategic priorities have experienced shifts, with European governments increasing investments in space and defense. These investments emphasize the development of domestic industrial capabilities. French believes that the current environment presents an important opportunity for Rocket Lab in Europe.
A key consideration for regulators and industry observers is whether Mynaric, if acquired by Rocket Lab, would still be considered a European entity. This status is crucial as it could affect Mynaric's eligibility to compete for Europe’s planned sovereign communications network, known as IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite). The multi-billion-euro program, supported by the European Union, aims to strengthen Europe’s independence in secure satellite communications and may restrict participation to firms under European control.
French indicated that Rocket Lab would aim to “enhance Mynaric’s ability to compete” for European programs and meet eligibility requirements for IRIS². The political sensitivities are further heightened by Germany’s announcement of plans to invest approximately $40 billion in defense space technologies over the next five years. This unprecedented commitment underscores growing concerns about reliance on U.S. systems and the security challenges posed by Russia.
This surge in funding is driving what officials describe as a push for “sovereign space systems” that nations can independently own and operate. French described these developments as “very exciting” for the industry but declined to comment on how they might impact Rocket Lab’s pending acquisition. “I won’t speculate on how it’s going to go, or how it is going,” he said. “But I think it’s very logical to think that if it all does work out, Mynaric’s ability to bid will be unchanged,” he added, referencing potential participation in IRIS² or other European programs.
Randy Segal, a partner at Hogan Lovells specializing in the space industry, stated at the MilSat panel that Germany’s review is likely to hinge on national interest considerations and whether “they think it’s good for Germany.” She clarified that she had no direct knowledge of the deal. “Regulators make assessments on what is good for the country and that varies from country to country,” Segal said. In the United States, regulators might require a U.S. ownership structure to approve an acquisition by a foreign company.
Other countries prioritize jobs staying in the country or facilities in the country. “And so all of this is dependent on the regulator. I have no insight into what is going on in Germany, but if the German government does approve the transaction, you can be assured that they will be supportive of Mynaric after the transaction as well,” she said.
Mynaric, publicly traded on both Nasdaq and the Frankfurt Stock Exchange, produces the CONDOR Mk3 optical terminal, designed for inter-satellite laser links. The system is currently used on satellites procured by the U.S. Space Development Agency for the Proliferated Warfighter Space Architecture, a constellation of hundreds of defense satellites.
Rocket Lab’s CEO Peter Beck said in May that the decision to acquire Mynaric followed Rocket Lab’s selection of the company’s terminals for its satellites under a $515 million contract with the Space Development Agency. “We chose Mynaric as our optical terminal in our SDA program because we believed it was the best. It was the lightest and the highest performing terminal.”