Jan 30 (Reuters) - Australia's Electro Optic Systems ( EOPSF ) is "very likely" to shift its headquarters and stock market listing from Australia to Europe within a year, its CEO told Reuters, in a strategic pivot to capitalise on booming European defence spending.

EOS won the world's first export contract for a 100-kilowatt-class laser weapon when the Netherlands bought its system for 71 million euros ($85 million) in August 2025.

CEO Andreas Schwer now sees scope for many similar deals amid urgent European demand for drone-defence technology and ‌growing sovereignty concerns over where intellectual property is held.

FINAL DECISION EXPECTED IN FIRST HALF

If completed, the shift would make EOS the first major defence company to relocate permanently to Europe to keep access ​to the continent's expanding defence market, as governments scramble to build sovereign military capabilities amid concerns of reduced U.S. support under President Donald ‍Trump.

Schwer said a final decision was expected in the first half of 2026. Germany is a likely ⁠location for the new base and ⁠listing, though Amsterdam is also under consideration given the Netherlands' role as EOS's first laser-system customer. He declined to identify a third country being considered.

The choice will depend partly on whether ‌the country agrees to enter a long-term framework agreement with EOS, Schwer said.

Shifting ​the headquarters requires no regulatory approval and "should happen by the end of this year", Schwer said. A relisting could happen then, or in early to mid-2027.

Production and engineering facilities are already being set up in Germany, Schwer said, adding ⁠EOS was in talks with 10 European governments about future orders.

Destroying ‍small drones with missiles ​can cost tens of thousands of euros per shot, compared with as little as one to 10 euros for high-energy laser systems, a price gap reshaping air-defence economics as drone threats proliferate.

"There is no noise, no gunshot, no light. It simply causes ‍the drone to fall from the heavens from a huge energy impact that makes it melt down," Schwer said.

High-energy lasers are not yet fully battle-tested. Rain, fog and dust can severely degrade the effectiveness of the beams, while substantial cooling and energy demands make frontline use hard to predict.

EUROPE'S BATTLE FOR SOVEREIGNTY

Control of IP is emerging as a central issue in Europe's defence build-up.

Anticipated export curbs on U.S. laser systems exceeding 50 kW make it imperative for Europe to develop its own capability.

"We have not seen any client who told us they don't mind where you ​produce and where ‍the IP is sitting. Those times are gone," Schwer said.

EOS owns all its IP, which is domiciled in Singapore, enabling it to transfer its technology to clients, Schwer said. It benefits from Singapore's export rules, which make it relatively easy to ​transfer or duplicate IP.

EUROPE'S RACE TO CATCH UP

Amid mounting security threats from Russia's war in Ukraine, EOS's plan to relocate highlights both Europe's technological gap and its determination to reduce dependence on the U.S.

The U.S. and China have already fielded laser demonstrators with combat units, though they are not yet deployed at scale. A 100 kW fibre laser system developed by Israel's Iron Beam became the first to be fully deployed in December.

In contrast, Europe's high-energy laser programmes remain largely in prototype or research and development. No European high-energy lasers exceeding 50 kW are in operational service.

EOS, meanwhile, is developing a 300 kW laser system, which it says ​would allow it to shoot down missiles and rockets, as well as drones.

Germany's Rheinmetall and European missile maker MBDA have demonstrated a 20 kW naval laser system in sea trials, while France's Cilas has tested a 2 kW system against small drones.

Rheinmetall had planned to start series production of its laser weapon systems in 2029, but is now aiming for ‍an earlier start given the current environment, a spokesperson said.

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