How many European companies does it take to beat SpaceX?
Europe is home to several national champions in the aerospace and defence sector.
But for Europe as a whole to compete globally with the US and China, those national champions will need to turn to M&A to create continental leaders. Yet while rhetoric for such deals has increased, few have happened because of domestic concerns in each market.
Thursday provided a rare example of action: the Franco-German Airbus, Italy’s Leonardo, and France’s Thales announced a long-awaited deal to combine their space businesses in order to create a pan-European champion that can compete in a market that has been disrupted by Elon Musk’s SpaceX.
Under the structure of the unusual deal, the new Toulouse-based entity will employ about 25,000 people and have annual revenues of €6.5bn. Airbus will own 35 per cent, with the others holding 32.5 per cent each, the FT’s Peggy Hollinger and Sylvia Pfeifer reported.
Active talks took place over the past year. Deutsche Bank advised Leonardo, while Lazard worked with Thales and Goldman Sachs was with Airbus.
The new group is to operate under joint control, with the companies saying the entity will be modelled on MBDA, Europe’s missile champion created in 2001 by Airbus, the UK’s BAE Systems and Leonardo.
The deal, in many ways a response to Trump’s focus on US defence spending, won’t become operational until 2027, deep into his second presidency.
Only then will it prove whether it can compete in a space dominated by Americans. Any signs of success will give momentum to cross-border consolidation in Europe, something bankers will be cheering from London to Frankfurt.