The European Commission has given the green light to the formation of a business joint venture (JV) between BAE Systems (BAES), Japan Aircraft Industrial Enhancement (JAIEC), and Leonardo to develop a sixth-generation combat aircraft.
The three parties reached an agreement for the JV in December 2024.
This JV will serve as the prime contractor and lead systems integrator for the Global Combat Air Programme (GCAP) throughout the product’s lifespan, which is anticipated to extend beyond 2070.
The commission was notified of this transaction on 22 April 2025 and its investigation focused on multi-role combat aircraft, which will be used by Italy, the UK, and Japan.
The parties involved in the transaction cited strategic and economic reasons for pursuing this venture and they are considering to sell the aircraft to other governments in the future.
During its assessment of the transaction’s impact on both Italian and international export markets for multi-role combat aircraft, the commission concluded that there would be no competition concerns arising from this deal due to no new horizontal overlaps in the companies’ activities within the relevant Italian market.
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By GlobalDataConsequently, the commission determined that this proposed transaction would not pose any competition concerns within the European Economic Area (EEA) and thus granted unconditional clearance.
BAES is headquartered in the UK and Leonardo has headquarters in Italy. Both the firms are engaged in the aerospace, defence and security industries. JAIEC serves as a governmental body that advocates for the aerospace sector within Japan.
They will each hold 33.3% stakes in the new joint venture, which will be headquartered in the UK.
The JV will delegate the production and ultimate assembly of the aircraft to BAES, Leonardo, Mitsubishi Heavy Industries, and other entities within the supply chain.
The structure of this joint programme is strategically planned to enhance and expand the industrial capacity across all participating countries by ensuring that tasks related to design, development, manufacturing, and production are shared equitably.
The first CEO for this JV will initially be appointed from Italy.
At the time of signing the agreement, BAE Systems chief executive Charles Woodburn said: “The new business will bring together the significant strengths and expertise of the companies involved to create an innovative organisation that will lead the way in developing a next generation combat air system, creating long-term, high value and skilled jobs across the partner nations for decades to come.”
