LBA Systems: Italy approves Leonardo and Baykar drone joint venture under strict conditions

In June, the Italian government approved the joint venture LBA Systems, which Baykar and Leonardo had established in March 2025 by means of a memorandum of understanding (MoU). The conditions attached to the approval point to the military, industrial and security-policy significance of the cooperation.

Accordingly, the joint venture may sell drones only to countries that are politically tied to Europe and NATO; the same applies to any resulting international further development. In addition, Italy is invoking the so-called “golden power” rule, which protects the country's strategic national interests in mergers and acquisitions. On this basis, the government can impose conditions and even block transactions.

LBA Systems: access for Baykar, limits in its core markets

With these strict requirements, Rome wants to prevent European drone technology from flowing to other regions. They reflect the sensitivity of the technologies and the strategic value of the partnership for Italy's national security. For Baykar, however, LBA Systems indirectly opens the way into the EU/NATO area, where the company has so far been active only to a very limited extent. At the same time, the country restrictions mainly affect the regions that have so far been Baykar's most important sales markets: Africa, the Arab world and Asia.

In the partnership, Leonardo's know-how in certification and mission systems meets Baykar's leading position in unmanned platforms and AI technologies. The shares are split 50 per cent each between the two companies, and the joint venture is headquartered in Italy. The main target is the growing European market for unmanned aircraft systems (UAS), whose revenue is estimated at close to 100 billion euros by 2035.

From a technological point of view, the cooperation carries great weight because it makes optimal use of the two companies' complementary capabilities. Leonardo brings extensive experience in the development and certification of mission systems, payloads and integrated multi-domain technologies – areas that are decisive for the next generation of UAS. Baykar, in turn, is one of the world's pioneers in AI-controlled unmanned platforms that have already been used in various conflicts.

Statements by Italian and Turkish politicians and by company representatives underline how strongly the cooperation is backed politically. Leonardo CEO Roberto Cingolani emphasised that he sees the partnership as a new strategic international ally in unmanned technologies and a significant increase in the capabilities of both companies.

Selçuk Bayraktar, Chairman and CTO of Baykar, spoke of an important milestone in expanding Baykar's technological footprint and strengthening the company's global presence. Italy's Defence Minister Guido Crosetto described the cooperation agreement as an important step towards innovation and international collaboration.