The first product from the alliance will likely be a military drone capable of carrying all the munitions currently used by fighter jets, with a prototype ready in about a year’s time.

Italy's Leonardo and Turkey's Baykar announced on Thursday they were setting up a joint venture to produce unmanned aerial vehicles (UAV), as defence companies scramble to respond to the surge in European military spending.

Italian defense and aerospace company Leonardo SpA and Turkish drone manufacturer Baykar are set to announce a partnership on drones, according to people familiar with the matter.