21 October 2025 Three major European aerospace companies – Leonardo, Airbus, and Thales – have, according to sources cited by Reuters, reached a preliminary agreement to merge their satellite activities. The move follows over a year of negotiations aimed at creating a new entity capable of competing with global players such as SpaceX, led by Elon Musk. The proposed merger, estimated to be worth around €10 billion, is intended as a response to the mounting challenge from low-cost satellite providers like Starlink. The deal would combine Airbus’s loss-making satellite division with Thales Alenia Space and Telespazio, both of which are currently owned by France’s Thales and Italy’s Leonardo. The negotiations have run into several obstacles, including disagreements over governance structures, valuation, and the distribution of jobs and technologies between France and Italy. Recent political turbulence in France may also have complicated matters. Despite these difficulties, the companies are reportedly close to finalising a framework agreement, which must still be approved by the boards and regulatory authorities. The European Commission’s competition review remains a significant hurdle. Previous attempts to merge the satellite businesses were blocked by antitrust concerns and national rivalries. However, the rise of Starlink and growing demand for smaller, more affordable satellites is putting pressure on the European companies to consolidate or risk losing market share. It could take up to two years before the proposed merger becomes a reality, but this initial agreement is an important first step. The deal reflects the changing landscape of the space industry, where innovative players like SpaceX are disrupting traditional models. As demand for satellite services rises due to applications in communications, Earth observation, and scientific research, European companies are seeking to strengthen their positions through collaboration and innovation. Business AM