Airbus and Safran to merge space launcher business into equal European rocket JV

French aerospace groups Airbus Group SE and Safran SA today agreed to merge their space launchers business into an equal European rocket joint venture.

Under the deal, Safran will pay €750 million ($833 million) to Airbus to get an equal stake in the JV, which is expected to close today.

''Today's final step is the culmination of an ambitious strategic initiative, started in 2014, to reshape the launcher industry in Europe and better serve French, German and European strategic interests,'' both companies said in a statement.

The JV will incorporate the parent companies' assets and subsidiaries related to its core business and have 8,400 employees located in France and Germany.

Airbus and Safran had initiated talks in 2014 to merge their space launchers business and formally set up a joint venture in January 2015, but the closing was hampered by the French government's indecision on how to treat the payment for tax purposes.

Airbus Safran Launchers was already managing launcher programme activities, but today's deal will pave the way for both companies to focus on the next generation of European rockets - Ariane 6 launcher, whose first flight is expected in 2020.

The Ariane 6 launcher is expected to have lower costs than the existing Ariane 5 and will compete favourably with lower-cost rivals such as Space Exploration Technologies Corp.

Tom Enders, CEO of Airbus, said: "With the closing of this agreement, Airbus Safran Launchers becomes fully operational and will focus all its efforts on delivering more competitive solutions to its customers. Top of the list is the next generation Ariane 6 launcher, which is due to have its maiden flight as early as 2020."

"Achieving such a radical transformation is a complex and challenging task. But it sets us firmly on the path to a more integrated, more efficient and more competitive European launcher industry," said, Philippe Petitcolin, CEO of Safran.