Europe’s strategic autonomy push fuels space mega-merger

WASHINGTON — Today’s agreement by three of Europe’s biggest defense firms to merge their space businesses is driven not just by market imperatives in the face of US rival SpaceX, but also by the growing angst in European countries about protecting collective sovereignty, according to government officials and experts.

The move by Airbus, Leonardo and Thales comes as Europe’s key institutes with a role in space, as well as major space powers such as France, Germany and Italy, increasingly turn their sights to bolstering military space capabilities, they said.

The three firms said in a joint statement that their new joint company, nicknamed Project Bromo until an official company name is chosen, is aimed at strengthening Europe’s “innovation capability, strategic autonomy and competitiveness” across the space sector (with the exception of launch). The partners are forecasting an annual turnover of €6.5 billion ($7.5 billion).

The merger, in the wind for the past year, has been widely touted as a European effort to build a satellite powerhouse with the capacity to rival SpaceX’s Starlink.

Both Airbus and Thales already are participating in a joint program funded by the European Commission and European Space Agency (ESA) working to build a Starlink-like satellite communications and internet network in low Earth orbit, called Infrastructure for Resilience, Interconnectivity and Security by Satellite, or IRIS².

An initial 12-year contract worth about €10.6 billion ($12.3 billion) was inked in December 2024 by the commission and the SpaceRISE consortium led by Eutelsat, SES and Hispasat, and supported by Thales Alenia Space, OHB, Airbus Defence and Space, Telespazio, Deutsche Telekom, Orange, Hisdesat, and Thales Six.

But analysts point out that neither the IRIS² constellation of some 282 satellites, nor Project Bromo, is big enough to outrun Starlink on its own, but rather are pieces of a mosaic of European activity designed both to bolster regional clout in the international marketplace and keep a toe hold in the intensifying geopolitical war for the heavens being waged by China, Russia and the United States.

“Project Bromo is not a Starlink killer. Pooling manufacturing can give strength to satellite production, but fully utilizing that capacity means building a mega-constellation, and … IRIS² is too small to fill that need,” Caleb Henry, director of research at Quilty Space, told Breaking Defense.

“Project Bromo is a sovereignty play,” he explained. “Merging Europe’s two largest satellite manufacturers, plus Leonardo’s space business, would have been viewed as severely anti-competitive a decade ago. Today the greatest perceived competitive risk isn’t a European monopoly, it’s getting left behind by the U.S. and China. Rather than having European space giants compete heavily amongst themselves, they can focus on winning business against competition outside the continent, and in doing so, preserve Europe’s role in the great power politics of space.”

This includes strengthening Europe’s hand in military space, one European government official told Breaking Defense.

European countries “have woken up” to both the centrality of space capabilities to military might, and the increasing threats to space systems posed by Russia and China, the official explained.

Tim Farrar, a veteran European space market analyst, agreed.

“Everyone is maneuvering around the EU’s interest in space and interest in defense,” he said.

Further, the timing of the merger agreement also seems to have been aimed at getting in front of major year-end meetings by various European institutions to set priorities and future funding, the European government official said.

The 27-member nation European Union’s ruling European Council today approved a new five-year plan for building up defense capabilities, called Preserving Peace — Defence Readiness Roadmap 2030, that includes the development of a “European Space Shield” among its four pillars.

“The European Council calls for accelerated joint development of space assets and services that serve security and defence purposes, as well as for the protection of existing assets, including dual-use assets, given their importance for Europe’s strategic autonomy,” the council’s press release stated.

The European Commission, the EU’s executive branch responsible for managing the collective budget, proposed the new plan on Oct. 15 but included few details about the space shield concept, except noting that the idea is to build upon current EU programs such as Galileo — Europe’s version of the US GPS satellite network — and IRIS².

Further, ESA will hold its ministerial meeting Nov. 26-27, where the 23 member nations will decide on a proposal by Director Josef Aschbacher to spend some €23 billion ($26.25 billion), a 36 percent increase over the last budget set in 2022, according to a June article in SpaceIntel Report.