Thales and Airbus space deal would create European monopoly, warns rival

Exclusive: Leonardo fears merger will hinder competition and innovation

Deal would create a giant with revenues of €15bn, dwarfing rivals

A proposed merger between Thales and Airbus space division would create a European monopoly and stifle competition, the chief executive of rival Leonardo has warned.

Alessandro Profumo told The Telegraph that the deal would create a company with revenues of €15bn (£13bn), dwarfing its rivals.

He said this would give the merged entity too much power over the European space market and could lead to higher prices and less innovation.

"This merger would create a European monopoly in the space sector," said Profumo.

"It would be a bad deal for Europe, for competition, and for innovation."

Thales and Airbus announced plans to merge their space businesses in September. The deal is still subject to regulatory approval, but it is expected to be completed by the end of the year.

The companies have said the merger will create a "European champion" in the space sector, with the combined entity having the scale and resources to compete with global rivals such as Boeing and Lockheed Martin.

However, Profumo said he was sceptical about these claims. He said that the merger would actually reduce competition and stifle innovation, as the combined entity would have less incentive to invest in new technologies.

"I don't believe that this merger will create a European champion in the space sector," said Profumo.

"I think it will create a European monopoly that will be bad for competition and for innovation."

The European Commission is currently investigating the merger. It is expected to make a decision on whether to approve the deal by the end of the year.