Italy's Leonardo and France's Airbus and Thales in talks over space alliance

By Giulia Segreti

ROME (Reuters) -Leonardo is in talks with France's Airbus and Thales over alliances in the space sector, the head of the Italian aerospace and defence group said on Tuesday, confirming for the first time the ongoing discussions.

"We are discussing in a very constructive way with Thales and Airbus about possible alliances and synergies for a stronger Europe in the space industry," Leonardo CEO Roberto Cingolani said in a call with analysts after the release of the company's results for the first half of 2024.

He added that a new, combined strategy was required because Europe needs a stronger space organisation to compete with bigger competitors such as the U.S. and China.

The European Union is aiming to pursue a more aggressive European space strategy to prevent being muscled out by U.S. and Chinese launcher technology.

Reuters reported earlier this month that the three companies were exploring a tie-up of space activities.

On Monday sources said Airbus was drawing up a turnaround plan for its struggling space business, without waiting for the outcome of the talks with Leonardo and Thales. The companies did not comment on the matter.

Cingolani said on Tuesday work among the three companies is "in progress" and that the talks are chracterised by a "collaborative spirit".

Leonardo manufactures satellites, orbiting infrastructure and sensors and manages satellite services and propulsion and launching systems. It has two joint-ventures with Thales: Thales Alenia Space and Telespazio.

Airbus and Thales Alenia Space are Europe's largest makers of satellites for telecommunications, navigation and surveillance.

"Our new space division is a rather massive operation," Cingolani said, adding that Leonardo would be very "selective" in its activities in the space business.

(Reporting by Giulia Segreti; editing by Cristina Carlevaro and Paul Simao)