EU approves joint defense venture by BAE, Leonardo, and Japan partner
Business3 June 2025, 12:53 PM
The deal primarily involves the development of multirole combat aircraft — military fighters designed for a variety of mission types. According to the participating parties, the strategic and economic goal is to develop a sixth-generation combat aircraft. The joint venture will serve as the prime contractor and lead systems integrator for the aircraft.
The aircraft will be developed for the governments of Italy, the United Kingdom, and Japan, with potential future sales to other jurisdictions or state customers.
The European Commission reviewed the transaction's impact, focusing on the Italian and international export markets for multirole combat aircraft. Following a market investigation, the Commission concluded that the deal would not raise competition concerns, citing the lack of overlapping business activities in the relevant markets. As a result, the Commission gave the proposed transaction unconditional approval within the European Economic Area.
The joint venture will lead the Global Combat Air Programme (GCAP), a trilateral effort between Italy, the U.K., and Japan. Each partner will hold a 33.3% stake in the venture, which will be headquartered in the United Kingdom. The first CEO will be appointed from Italy.
BAE Systems is a global defense, aerospace, and security company headquartered in the United Kingdom.
JAIEC is a public entity representing Japan’s aerospace industry, headquartered in Tokyo.
Leonardo is an Italian industrial and technology company specializing in aerospace, defense, and security.
In December 2022, Japan, the U.K., and Italy announced the launch of GCAP to jointly develop a next-generation fighter jet by 2035, combining the British-led Tempest project with Japan’s FX program.
The trilateral partnership emerged following similar efforts by France, Germany, and Spain to develop a European military aircraft amid growing security concerns following Russia’s invasion of Ukraine.
In May 2025, the European Union approved the creation of the Security Action for Europe (SAFE) instrument, which allows borrowing of up to €150 billion ($163.5 billion) to invest in the defense industries of EU member states.