European space deal to create SpaceX rival draws antitrust claims
Germany’s OHB warns three-way merger would hurt competition, ultimately increasing costs for taxpayers
The CEO of a leading European satellite group has warned that a proposed merger of the space businesses of Airbus, Leonardo and Thales would weaken competition while doing little to strengthen the bloc against rivals such as Elon Musk’s SpaceX.
Germany’s OHB told the FT that governments would be left with fewer suppliers for publicly funded space programmes, ultimately increasing costs for taxpayers.
“This is a consolidation that reduces competition”, said Marco Fuchs, the chief executive of OHB. “That’s not good for the European citizens, that’s not good for the taxpayer, that is not good for the offering in the European market.”
Airbus, Thales and Leonardo, which agreed to merge their space units in October in a deal codenamed Bromo, are poised to file for formal antitrust clearance with European competition authorities.
The proposed tie-up comes as Europe’s space industry faces growing pressure from US and Chinese competitors. The merging companies argue scale was needed to remain competitive in the wake of the rapid expansion of SpaceX’s Starlink.
But Fuchs rejected the merged company’s ability to compete against SpaceX, arguing the US company primarily competed in launch services and satellite communications rather than manufacturing satellites for European institutional customers.
He also pointed out that Starlink’s founder had been characterised by some critics in Europe as “evil Elon”. “It’s a nice theme, but it’s not ‘evil Elon’ here. It’s a monopoly in Europe that is created,” he said.
Instead, Fuchs argued, the merger would reduce competition in programmes funded by the European Space Agency, the European Commission and national governments, where most demand comes from public procurement. While this could benefit his own company, he warned that flagship projects such as Galileo would face fewer credible bidders, weakening competition and ultimately increasing costs for taxpayers.
OHB last month announced it would issue new shares to raise up to €510mn, in a move Fuchs said would help to pursue more aggressive growth in response to the challenge laid down by the Bromo merger.
Fewer competitors as a result of a merger “obviously creates an opportunity [for OHB]”, said Fuchs, who added: “I am benefiting from this merger, but I find it really strange that . . . Europe is buying that story.”
He said German policymakers might be positioning the Bromo deal as a “symbol of Franco-German friendship” at a time when Berlin has cancelled or scaled back joint defence projects, such as the Future Combat Air System (FCAS), while embarking on a historic military build-up.
“The big picture is: Germany is arming up and does not want to scare its neighbours,” Fuchs said. “That’s why they need [the satellite merger]: OK, we cancel the aircraft but now on space we do something nice together.”