London/Paris (Reuters) -European aerospace groups Leonardo, Thales and Airbus have redoubled their efforts to try to combine their satellite activities in a joint venture which would be valued at 10 billion euros and hope to conclude an initial agreement in the coming weeks, have told Reuters sources close to the file.

As part of the “Bromo project”, named after an Indonesian volcano, the three companies plan to create a European satellite manufacturing company capable of competing with the Chinese and American rivals, including Starlink by Elon Musk.

The talks resumed after a difficult period during the summer, in particular due to the governance agreement, said three sources, according to which a memorandum of understanding could be signed by the end of the month.

Political signals have been encouraging so far, but ownership and governance details must be approved by the nations concerned, have added the sources. If it is born, joint venture should include entities dedicated to the protection of sensitive national interests.

The exact participations of each company in the joint venture are still under discussion.

A spokesperson for Leonardo refused to comment.

Airbus referred to a declaration by the director general Guillaume Faury, who said at the start of the week that companies were getting closer to an agreement and that they discussed with European governments on this subject, believing that the project is “on track”.

Thales was more prudent: “No agreement has been reached at this stage. We are continuing our work. Any other comment would be premature.”

Several attempts to create a European satellite champion have failed in the last decade due in particular to concerns related to competition and national rivalries.

But the spectacular boom of Starlink and the evolution of the market towards cheaper satellites and low orbit have increased pressure on the main European suppliers, which must group their assets under penalty of being ousted from the market.

The European Union at the same time seeks to strengthen its sovereign capacities to be able to cope with the geopolitical risks and the inflection of American policy.

The three companies have minority government shareholders and analysts believe that any agreement on assets and sensitive technologies would require political approval.

(Report of Amy-Jo Crowley, Tim Hepher and Mathieu Rosemain, with the contribution of Giulia Segreti, Elvira Pollina, Giuseppe Fonte and Markus Wacket; Tangi Salaün)

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