Airbus, Leonardo, and Thales have reached an agreement to merge their satellite businesses to create a single European technology company that could rival Elon Musk’s SpaceX.
The agreement is expected to create a company with annual revenues of around 6.5 billion euros (5.6 billion pounds).
The French aerospace company Airbus will own 35% of the new venture, while Leonardo and Thales will each hold 32.5%, according to The Guardian.
The company, which currently has no name, will be one of the largest of its kind in Europe, combining satellite production, space systems, components, and services from the continent's leading manufacturers.
Guillaume Faury, CEO of Airbus, Roberto Cingolani, CEO of Leonardo, and Patrice Caine, CEO of Thales, said in a joint statement that the new company is essential for the European space industry.
The goal is for the company, headquartered in Toulouse, France, and employing approximately 25,000 people, to be operational by 2027, once approved by European regulatory authorities.
The companies have recently faced difficulties in their space operations. Last year, Airbus reported losses of 1.3 billion euros and cut 2,000 jobs in its defense and space division.
Thales Alenia Space, a joint venture between Thales and Leonardo, laid off over 1,000 employees last year.
SpaceX, founded by Musk in 2002, has become one of the largest startups in the world, with a valuation of 400 billion dollars (300 billion pounds).
In addition to offering cheaper rocket launch services, SpaceX's Starlink constellation, consisting of smaller, relatively inexpensive satellites in low Earth orbit, is reducing sales of larger geostationary communication satellites from European companies.
It is the dominant player in rocket launches and satellite internet. Its main rivals are other American names, such as United Launch Alliance, a joint venture between Boeing and Lockheed Martin, and Blue Origin, founded by tech billionaire Jeff Bezos.
Dependence on Musk has become a growing concern in recent years, as he has become the largest donor to former U.S. President Donald Trump and has supported far-right European politicians.