Italian defence firm Leonardo nears drone partnership with Turkish Baykar

Italy’s Leonardo is close to agreeing a manufacturing partnership with Baykar, the Turkish drone maker co-owned by President Recep Tayyip Erdoğan’s son-in-law Selçuk Bayraktar.

People with knowledge of the talks told the Financial Times that the two companies will sign a memorandum of understanding within the next week, shaping the terms of a joint venture that could significantly boost Europe’s drone production capacity. Baykar is one of the world leaders in the production of AI-powered drones.

Leonardo is part of a trio of defence champions involved in the development of a next-generation fighter jet under the Global Combat Air Programme (GCAP), together with Britain’s BAE Systems and Japan’s JAIEC. JAIEC is jointly funded by Mitsubishi Heavy Industries and the Society of Japanese Aerospace Companies.

In October, Mitsubishi and BAE Systems showcased models of unmanned aerial vehicles that could be integrated into GCAP.

Baykar’s flagship Bayraktar TB2 medium-altitude long-endurance combat drone is mainly used by the Turkish defence forces. However, according to its website, 90% of the company’s revenues come from exports. In 2023, exports to 35 countries generated $1.8 billion in revenue.

Although the details of the Italian-Turkish partnership have not yet been finalised, the combination of Leonardo’s technology and Baykar’s platforms could lead to the development of a high-tech drone that can operate on the sixth generation platform.

In return, the partnership will give Baykar access to the European market, which it has been targeting for some time.

Last month, Baykar took over the aerospace arm of Italian motor vehicle manufacturer Piaggio. “With this acquisition, Baykar is preparing to expand its influence in the European aerospace market,” the company said at the time. The company also said it wanted to increase employment at Piaggio’s facilities in Italy.

Analysts see the acquisition of Piaggio Aerospace by Baykar as a strategic move to overcome European import barriers faced by Turkish defence companies.

According to a person close to the talks, Leonardo and Baykar’s contacts began after the Piaggio deal was close to being finalised. Leonardo’s CEO Roberto Cingolani and the Bayraktar brothers have exchanged visits over the past month.