The European Commission has cleared the way for the merger of a giant aerospace company that could eventually challenge the U.S. space industry in the commercial space marketplace.
The joint venture, called Astrium, will create the world’s third largest space company behind Lockheed Martin and Boeing. It brings together DaimlerChrysler’s German aerospace unit DASA, Britain’s BAE Systems and France’s Matra Marconi Space -- a unit of Aerospatiale.
The three-way enterprise will give customers a one-stop shop for everything from helicopters to rockets.
"It will be the center of gravity for Europe’s space activities," according to a joint news release from all three companies.
"We will be doing what the American industry has been doing for the past three to four years," said Remi Roland at Matra Marconi Space in Paris. "By pooling our resources, we hope to have a better position to compete in the world market."
Astrium will focus on Europe’s Ariane space program, satellite observation of Earth, telecommunications, scientific research and launchers.
Analysts said Astrium effectively would become Europe's main space company, similar to Airbus Industrie's role as Europe's maker of jet airliners.
"Astrium will try to strengthen its position in the world market by focusing on integrating its launcher and satellite programs," said Philippe Gossard, aerospace analyst for Credit Lyonnaise in Paris.
Though Astrium will have a strong market position against Lockheed Martin and Boeing, it will not likely bump the two companies from their top rankings in the near future because it will not be able to compete for contracts from the U.S. government, Gossard said. "The U.S. government creates a very complicated environment," he said.
Nevertheless, Europe still holds the lion’s share, about 50 percent, of commercial launches in the world. The U.S. comes in second at about 30 percent.
In December, the European Commission began a probe into the proposed merger, saying it was concerned that the new company would cause an imbalance in Europe’s scientific satellite sector. The commission said Astrium could shut down such competitors as number-four France’s Alcatel Space and Italy’s Alenia Aerospazio because its parent companies supply certain components for scientific satellites and space infrastructure.
To address these concerns, the companies agreed to divest certain interests in satellite component companies and license some technologies to competitors.
The deal paves the way for the creation of the European Aeronautics Defense and Space Company (EADS) -- Europe’s new air defense giant.
EADS, which will hold a 75 percent share in Astrium, will be put in place after a merger of Aerospatiale Matra, DASA and Spain’s Construcciones Aeronauticas.
With about 7,500 employees, Astrium will have projected annual sales of $2 billion, according to Matra Marconi Space’s Roland.
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