Italy gives conditional approval to Leonardo-Baykar drones joint venture

ROME, June 17 (Reuters) - Italy's government has given conditional approval to the joint venture between state-controlled defence group Leonardo and Turkey's Baykar to produce unmanned aerial vehicles (UAVs), a source told Reuters on Wednesday.

The deal, first announced in March 2025 and structured as a 50-50 partnership, aims to address Europe's weakness in the drone industry, with the two groups seeing a UAV market worth some $100 billion over the next 10 years.

The government cleared the partnership at a cabinet meeting on Tuesday.

Under one of its conditions, sales of the drones and any further international development of the joint venture will be limited to countries politically aligned to Europe and NATO. All technology used in the drones will be classified.

Italy exercised its so-called "golden power" rules, aimed at protecting strategic national interests in mergers and acquisitions, which allow the government to impose conditions or even block deals.

The agreement with Leonardo allows Baykar, one of the world's largest drone exporters, to access the European market and opens the way for expanded industrial activities in Italy.

The government approval of the joint venture was first reported by Italian daily Il Messaggero.

(Reporting by Giulia Segreti in Rome, editing by Alvise Armellini)