Italian defence company Leonardo and Turkish drone manufacturer Baykar are planning to jointly develop and produce unmanned aerial vehicles. A memorandum of understanding was recently signed by Leonardo CEO Roberto Cingolani and Baykar President Selçuk Bayraktar in Rome. The first prototype of the 50:50 joint venture, which will be based in Italy, is expected to be presented in about twelve to eighteen months. The two partners project the market size in Europe alone to reach 100 billion dollars over the next ten years.

Given the plans for a massive increase in defence spending in Europe, the two partners see good opportunities for their project, which focuses on the development of surveillance and combat drones.

Cingolani and Bayraktar say that the two companies complement each other perfectly. The family-owned company Baykar, founded in 1986 and led by Selçuk Bayraktar, the son-in-law of Turkish President Recep Tayyip Erdoğan, and his brother Haluk, brings its vast platform for unmanned flight systems. Leonardo will contribute its expertise in electronics, artificial intelligence, radar systems, and the development of mission and payload systems. Leonardo is also involved in the development of the European Eurodrone alongside Airbus and Dassault, which, according to Cingolani, belongs to a different segment.

For the Turkish company, which, with a revenue of 2 billion dollars, claims to be the world's leading drone exporter, the agreement provides access to the increasingly attractive EU defence market. Baykar exports to 36 countries worldwide, including six NATO and four EU states including Poland.

Baykar’s combat and reconnaissance drones, such as the Bayraktar TB2, were successfully used by Ukraine, particularly at the beginning of the war against Russia. According to the company, a drone production plant is being built in Kyiv. The systems of the Turkish company cover a wide range of drone systems, from a few kilograms to several tons of payloads.

Baykar and Leonardo have already been working together for about six years, with for example the Italians supplying radar systems. Cingolani is focusing on partnerships, including with Rheinmetall (tank manufacturing) and BAE Systems/Airbus (MBDA missile systems). This allows for the pooling of resources. The Leonardo CEO is calling for greater European cooperation.

The collaboration between Leonardo and Baykar is aimed at the global market. It is still undecided whether the drones will be used in conjunction with the combat aircraft project GCAP by Leonardo, BAE Systems, and Mitsubishi. The manned GCAP system is in competition with the German-French-Spanish Future Combat Air System.

Leonardo's stock has only known one direction over the past year: upwards. Its value has increased by 123%, and the company now has a market capitalisation of 26.7 billion euros.