Airbus, Thales and Leonardo are nearing agreement on the merger of their space businesses, aiming to create a European champion capable of competing in a market destabilised by Elon Musk’s SpaceX.

Leonardo’s board met on Tuesday afternoon, becoming the last of the three companies to approve the proposed structure, according to people close to the discussions. An announcement is imminent, but could still slip as some technical points are still being finalised.

Under the plan, Franco-German Airbus will own 35 per cent, with the other two holding 32.5 per cent each, according to two people with knowledge of the agreement. As part of the deal, Airbus is expected to receive a payment from its new venture partners to compensate for limiting its stake to 35 per cent, despite contributing roughly half the combined turnover.