OHB Warns Airbus-Led Space Merger Could Weaken Competition, Not Challenge SpaceX

According to the Financial Times, which first reported the comments by OHB Chief Executive Marco Fuchs, the executive argued that combining the three companies’ space operations would concentrate the European market rather than strengthen the region’s position against international competitors.

The planned transaction, known internally as “Bromo,” was agreed upon by Airbus, Leonardo and Thales in October. The companies are preparing to seek formal approval from European Union competition authorities, where regulators are expected to assess whether the merger would substantially reduce competition in the European space sector.

Supporters of the combination have argued that greater scale is necessary as European space manufacturers face increasing pressure from rapidly expanding U.S. and Chinese competitors. They have pointed in particular to the growth of SpaceX and its Starlink satellite communications network as evidence that Europe’s fragmented industry requires consolidation to remain globally competitive.

Fuchs, however, disputed that rationale. According to the Financial Times, he said SpaceX’s primary businesses differ from those of the proposed merged entity, noting that the U.S. company is principally active in launch services and satellite communications rather than manufacturing satellites for European institutional customers.

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The OHB executive also questioned the narrative that the merger is needed to counter Elon Musk’s influence in the space industry. The Financial Times reported that Fuchs argued the greater competitive concern lies within Europe itself, where the proposed transaction could create a more concentrated market for publicly funded satellite contracts.

Much of Europe’s institutional demand for satellites comes from organizations such as the European Space Agency, the European Commission and national governments, which procure spacecraft through competitive bidding processes. Fuchs warned that combining three major suppliers could reduce the number of credible bidders for flagship programs, including the Galileo satellite navigation system, potentially weakening competitive pressure during procurement.

Competition experts have long noted that public procurement markets can be especially sensitive to consolidation because fewer qualified suppliers may reduce pricing competition and limit innovation. Under the European Union’s merger control framework, regulators evaluate whether proposed transactions could significantly impede effective competition, including through increased market concentration or reduced incentives to compete for government contracts.

According to the Financial Times, Fuchs acknowledged that OHB itself could benefit commercially if rival suppliers merge, as fewer competitors may create additional opportunities to win contracts. Even so, he maintained that the broader effect on the European market would be negative if governments have fewer alternatives when awarding major space projects.

The company is also positioning itself for expansion. Last month, OHB announced plans to raise as much as €510 million through a share offering, a move Fuchs said would support more aggressive growth as the competitive landscape evolves following the proposed merger.

Fuchs additionally suggested that political considerations may be influencing support for the transaction. As reported by the Financial Times, he said some German policymakers could view the satellite merger as a demonstration of Franco-German industrial cooperation after Berlin reduced or reconsidered other joint defense initiatives, including aspects of the Future Combat Air System program, while simultaneously increasing defense spending.

Source: The Financial Times