Italian Space Agency to Airbus Safran: Hands off Vega
PARIS—The president of the Italian Space Agency on March 17 voiced strong opposition to a French industrial takeover of Italy’s Avio, which is prime contractor for the Italian-led Vega small-satellite launcher, in the latest indication of the challenges facing European launch-sector reorganization.
In a statement posted on the agency’s website, Roberto Battiston said Italian authorities “have to guarantee that the advanced European Vega launcher remains Italian in word and deed.”
Airbus Defence and Space and rocket-motor maker Safran have both indicated their interest in purchasing the 85 percent stake in Avio now held by Cinven, a private-equity investor that has been trying to monetize its Avio stake for several years.
Colleferro, Italy-based Avio’s minority shareholder is Italy’s aerospace giant Finmeccanica — recently renamed Leonardo — whose management has often spoken optimistically about buying out Cinven, alone or with partners.
But no deal has been consummated and in the meantime the value of the Cinven stake has risen substantially. European Space Agency governments in December 2014 agreed to a multi-year investment in a next-generation heavy-lift rocket, called Ariane 6, and in upgrades to the Vega rocket.
Ariane 6 and Vega are joined at the hip – or more precisely, joined at the first stage for Vega and the solid-fueled strap-on booster stage for Ariane 6. With Ariane 6’s boosters and Vega’s first stage produced by Avio, the production run is likely to be more than 30 cores per year.
The synergy helps both Ariane 6 and Vega builders keep their unit costs down through an enlarged production run. Government and industry officials have said the scale economies will be only marginally diluted when OHB SE of Germany develops a second booster-production line at its MT Aerospace division in Augsburg, Germany.
The advanced Vega-C rocket is scheduled to make its first flight in 2018. A further enhancement, called Vega-E, is in the design phase. The first Ariane 6 is scheduled to fly in 2020.
By 2023, the current Ariane 5 rocket is likely to be retired in favor of Ariane 6. The Europeanized Russian Soyuz rocket, operated from Europe’s Guiana Space Center in South America alongside Vega and Ariane 5, will also be retired from service around this time.
Airbus Safran Launchers, the prime contractor for Ariane 5 and Ariane 6, is expected to become a 74 percent shareholder of launch-service provider Arianespace of Evry, France, once the European Commission clears the company’s purchase of the 35 percent of Arianespace owned by the French government, through the French space agency, CNES.
With Airbus and Safran having merged their launch activities into Airbus Safran Launchers, they will no longer be bidding against each other for Avio.
Avio currently has a 3.4 percent shareholding in Arianespace, a position that European industry officials agree will grow now that the Vega rocket – five launches, five successes – has established itself and found what appears to be a thriving market in small science, technology and Earth observation satellites.
Industry officials have speculated that Avio and OHB could make a joint bid for the Cinven stake. OHB’s MT Aerospace has an 8.3 percent Arianespace shareholding. The two companies have declined to comment on this scenario.
As has been the case for some time, the position of the Italian government remains unclear. How determined is it to keep Avio in Italian hands, or at least to prevent its being subsumed into Airbus Safran Launchers?
Also unclear is how patient Cinven is willing to be in waiting for all this to shake out.
While Avio is Vega’s prime industrial building, ELV SpA of Italy is the Vega prime contractor. Avio owns 70 percent of ELV and the Italian Space Agency owns 30 percent, giving the agency a larger voice in Vega matters than it might have otherwise.
Battiston’s comments came as the European Commission makes an in-depth examination of Airbus Safran Launchers’ proposed purchase, for 150 million euros ($164 million), of CNES’s Arianespace shares.
Government and industry officials have said Avio and ELV have raised concerns that Arianespace, once it is dominated by Airbus Safran Launchers, will favor Ariane 6 over Vega for certain contracts. The lighter-version Ariane 62, with two strap-on boosters, could compete in the same markets as Vega.
In his March 17 statement, Battiston appealed to Italian national pride in Vega to warn against an Avio purchase by non-Italian strategic buyers. He did not mention Airbus or Safran by name and did not need to.
“First of all we want to say – with pride – that we are the sixth spacefaring power in the world,” Battiston said. “We have to maintain capabilities for an independent access to space.
“We have to guarantee that the Vega advanced European launcher remains Italian in word and deed. Investment fund Cinven holds more than 80 percent of the shares and could get a large payoff by selling its shares – even to space competitors.
“If that should occur, it would not only endanger the 1 billion euros of Italian public investment [in Vega], it would also be a defeat for spacefaring Italy, forcing it to ask, rather than to decide, to go into orbit.”
Source: Space News
18 Mar, 2016
Italian Space Agency to Airbus Safran: Hands off Vega
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