Rivals Challenge €6.5 Billion European Space Merger

Rivals Contest €6.5B Merger Over Competition Fears

A proposed €6.5 billion ($7.56 billion) merger between the space divisions of Airbus, Leonardo, and Thales is drawing formal opposition from European competitors. Marco Fuchs, CEO of German satellite maker OHB, and Spain's Indra Space have voiced concerns that the deal would unfairly reduce competition. They argue that consolidating the three giants would marginalize smaller players in bids for lucrative contracts from the European Union and the European Space Agency. OHB, which often collaborates with Thales Alenia Space—a key part of the proposed merger—fears this partnership could end, fundamentally altering its ability to compete for major projects.

Deal Aims for Global Scale, Faces EU Review by 2027

The three partners announced a preliminary agreement in October for the deal, codenamed "Bromo," to create a European champion capable of competing with state-backed international giants and U.S. firms like Elon Musk’s SpaceX. Proponents argue the merger is essential for Europe's strategic autonomy and is primarily targeting the global market. However, the project faces a significant regulatory hurdle. It requires antitrust approval from the European Commission, which has previously blocked large-scale mergers intended to create "European champions." The formal submission for approval is expected in the coming weeks, but a final decision is not anticipated until 2027 at the earliest.

Consolidation Clashes With Expanding EU Defense Market

The pushback occurs as Europe's institutional demand for satellite and space capabilities is expanding significantly, driven by security concerns following the war in Ukraine. The European Commission has proposed a fivefold increase to its defense, space, and security budget for the 2028-2034 period, targeting a total of €131 billion. Critics of the merger, such as Indra Space, argue that the new entity will inevitably focus on this protected European market rather than competing in the U.S. or China, where national companies are prioritized. This consolidation of supply power clashes directly with the growth in European demand, raising concerns that a single dominant player could control access to critical defense and infrastructure contracts.