Italy approves Leonardo-Baykar joint venture to develop next-generation drones

Newswire

Rome: Italy this week approved the establishment of a joint venture between defence giant Leonardo and Turkish drone manufacturer Baykar to develop and produce advanced unmanned aerial systems, according to Italian media reports.

The decision was cleared by Italy’s Council of Ministers under the country’s “Golden Power” regulations, which allow the government to review and impose conditions on foreign and strategic investments in sensitive sectors, including defence and national security.

The approval paves the way for a 50-50 partnership between Leonardo and Baykar focused on the design and production of next-generation remotely piloted aerial systems. The move was reportedly backed by Defence Minister Guido Crosetto and finalised ahead of a regulatory deadline.

However, the agreement has been subject to strict conditions aimed at safeguarding Italy’s strategic interests. These include requirements that international business activities of the joint venture be conducted only with countries aligned with European Union and NATO policies, ensuring compliance with broader security and foreign policy frameworks.

Italian authorities have also requested safeguards to protect classified information and sensitive technologies involved in the project, reflecting concerns over industrial security and the preservation of national technological capabilities.

The joint venture is expected to benefit both companies significantly. For Leonardo, the partnership opens access to an expanding global drone market estimated to be worth more than $115 billion over the next decade. For Baykar, one of the world’s leading unmanned aerial systems manufacturers, the collaboration is expected to enhance its access to European defence markets through Italy’s established industrial base.

The cooperation will involve multiple Italian facilities, including sites in Ronchi dei Legionari, Turin, Grottaglie and Rome Tiburtina, according to reports.

Leonardo and Baykar had previously signed a memorandum of understanding in March last year, with the joint venture formally launched in June 2025 under the name LBA Systems.

With the latest government approval, the partnership is now operational and expected to advance into its implementation phase under the agreed regulatory framework.