Italy approves Leonardo-Baykar drone joint venture with conditions

Italy’s government has approved a joint venture between state-controlled defense group Leonardo and Turkish drone manufacturer Baykar to produce next-generation unmanned aerial systems, according to reports Wednesday. Italy’s Council of Ministers cleared the 50-50 partnership under the country’s “Golden Power” rules, which allow the government to impose conditions or block deals involving strategically important sectors such as defense and national security. Defense Minister Guido Crosetto backed the approval, which came ahead of a regulatory deadline .

Conditions and safeguards

The government attached several conditions to the deal. International business activities must be directed only toward countries aligned with EU and NATO policies in order to safeguard Italy’s strategic interests and ensure supply-chain continuity. Italian intelligence agencies also requested measures to protect classified information and sensitive technologies involved in the venture, aiming to reduce the risk of losing national technological capabilities. All technology used in the drones will be classified .

Strategic importance

For Leonardo, the agreement provides access to a drone market the company estimates will be worth €100 billion ($115.9 billion) over the next decade. For Baykar—one of the world’s largest drone exporters—the partnership is expected to strengthen access to European defense markets through Italy’s industrial base. Facilities in Ronchi dei Legionari, Turin, Grottaglie, and Rome Tiburtina are expected to take part in the cooperation. Leonardo and Baykar signed a memorandum of understanding in March 2025 and formally launched the joint venture as LBA Systems in June 2025. The agreement is now operational.