European Space Alliance Positions Leonardo for Satellite Dominance

A groundbreaking satellite joint venture has been established, positioning Italian aerospace and defense conglomerate Leonardo at the forefront of Europe's strategic push into the space sector. The company has reached an agreement with French competitors Airbus and Thales to merge their satellite operations, creating a multi-billion euro entity designed to strengthen Europe's competitive position against global players like SpaceX.

The alliance, internally referred to as "Project Bromo," establishes a joint venture valued at approximately €10 billion. Ownership stakes have been carefully distributed among the partners: Airbus will control 35% of the venture, while both Leonardo and Thales will hold 32.5% each. This allocation reflects the delicate balance achieved during negotiations between the French and Italian space industries.

Leonardo's board of directors formally approved the framework agreement during a specially convened meeting. The breakthrough concludes more than twelve months of intensive discussions that had previously stalled over governance disputes and valuation disagreements.

Competing in the New Space Race

This consolidation represents Europe's most ambitious effort to date to close the competitive gap with SpaceX and emerging Chinese space enterprises. SpaceX has fundamentally transformed the satellite industry through its Starlink constellation, which has already deployed over 10,000 satellites into orbit.

Market timing appears favorable for the new venture. The satellite industry is undergoing a fundamental transformation, shifting away from expensive geostationary satellites toward more cost-effective low Earth orbit systems. Industry experts project substantial growth over the next decade, including:
- More than 43,000 new satellite launches
- A total addressable market worth $665 billion
- Intensified competition for government contracts

Should investors sell immediately? Or is it worth buying Leonardo SPA?

Leonardo's Strong Market Position

Leonardo enters this strategic partnership from a position of financial strength. The company's latest interim financial results for 2025 demonstrate robust performance:
- Revenue reaching €8.9 billion
- An order backlog exceeding €45 billion
- Share price stability within the €45 to €50 range

Market analysts have responded positively to the development. Deutsche Bank raised its price target for Leonardo shares to €57, while JPMorgan increased its target to €55.50. However, Goldman Sachs struck a more cautious note, suggesting that valuations across the European defense sector already appear elevated.

Regulatory Hurdles Ahead

The European competition authority presents the most significant obstacle to the venture's completion. Previous consolidation attempts within the space industry have frequently foundered on antitrust concerns and national rivalries. Regulators will meticulously examine whether the merger genuinely enhances Europe's global competitiveness or merely reduces competition within the regional market.

Full implementation of the agreement could require up to two years. The current framework agreement represents just the initial phase of a complex integration process that will combine Airbus's satellite activities with Thales Alenia Space and Telespazio operations.

The success of this venture would establish Leonardo as a dominant force in one of the 21st century's most strategically important industries. While the potential rewards are substantial, the risks associated with this ambitious undertaking are equally significant.