Aerojet Rocketdyne

History

2022

L3Harris Technologies Acquires Aerojet Rocketdyne $4.7 Billion

On December 18, 2022, the American defense corporation L3Harris Technologies announced an agreement to purchase Aerojet Rocketdyne Holdings, a rocket engine company.

Under the terms of the contract, L3Harris will pay $58 for each Aerojet Rocketdyne security. Thus, the total amount of the transaction will be $4.7 billion (including debt obligations). The takeover is expected to be completed in 2023, subject to necessary regulatory approvals. The agreement provides for payment at the expense of funds.

Pentagon rocket maker Aerojet Rocketdyne sold for $4.7 billion

Aerojet Rocketdyne, which has annual revenues of about $2.3 billion, operates sites in California, Arkansas, Florida, Alabama and Washington, as well as in other American states. The L3Harris deal is said to accelerate innovation in rocket propulsion to ensure U.S. national security.

{{quote "Within the framework of this acquisition, we will use the experience and skills of more than 50 thousand general employees to constantly improve development processes, improve business operations and increase the productivity of this most important national market," says Christopher Kubasik, CEO and Chairman of the Board of L3Harris. }} At the end of 2020, the American military-industrial concern Lockheed Martin announced its intention to acquire Aerojet Rocketdyne Holdings for $4.4 billion. But the deal was opposed by the U.S. Federal Trade Commission (FTC). The agency then stated that the merger would harm competition in the defense industry, as it would allow Lockheed to remove other contractors in the field of missile components such as engines for hypersonic missiles and control systems for interceptor missiles.^[1]

Lockheed Martin refused to buy Aerojet Rocketdyne for $4.4 billion

On February 14, 2022, it became known that Lockheed Martin refused its offer to buy rocket engine manufacturer Aerojet Rocketdyne $4.4 billion after the US Federal Trade Commission (FTC) filed a lawsuit to block the deal, arguing that it would lead to lower competition and higher prices in the defense sector.

In January 2022, the Federal Trade Commission filed a lawsuit to block the deal on the grounds that it would allow Lockheed to use its control of Aerojet to damage other defense contractors. Rocket maker Raytheon was a clear opponent of the proposed acquisition. The merger drew criticism because it would have given Lockheed a dominant position in solid rocket engines.

Lockheed Martin refused to buy Aerojet Rocketdyne for $4.4 billion

The implementation of this plan quickly faced resistance from the authorities. Elizabeth Warren, a Democratic senator from Massachusetts, sent a letter to the FTC objecting to the deal, warning that "waves of mergers and consolidations have [turned] the nation's defense industry from a competitive market with more than 50 companies into an oligopoly of just five major rivals."

The FTC filed a lawsuit to block the deal in January 2022, calling it the first lawsuit against a defense merger in decades. She said the U.S. Department of Defense also examined the potential acquisition and considered its implications.

Holly Vedova, director of the commission's competition bureau, said at the time:

Lockheed is one of the few missile intermediaries the US military relies on to deliver the vital weapons that keep our country safe... Without competitive pressure, Lockheed can raise the price the US government has to pay while delivering lower quality and fewer innovations.

The decision to scrap the takeover strikes at the development of Lockheed hypersonic weapons, a priority for the US government.

Our planned acquisition of Aerojet Rocketdyne would benefit the entire industry through greater efficiency, speed and significant cost-cutting for the U.S. government, "said James Taikle, chief executive of Lockheed Martin. - However, we have determined that in light of the FTC's actions, it is in the best interests of our stakeholders to terminate the transaction.[2]

2020: Lockheed Martin plans to buy Aerojet Rocketdyne for $4.4 billion

On December 20, 2020 the American military-industrial , the corporation Lockheed Martin announced the purchase of jet engine manufacturer Aerojet Rocketdyne. The deal is estimated at $4.4 billion.

The takeover of Aerojet was Lockheed's biggest acquisition since Jim Thicelet took over as CEO in June 2020. It aims to strengthen the company's propulsion capabilities amid competition from new entrants such as SpaceX and Blue Origin for space contracts with the US government.

The acquisition of Aerojet Rocketdyne will preserve and strengthen a critical component of the domestic defense industrial base and reduce costs for our customers and American taxpayers, Thicelet said in a statement.

Lockheed Martin acquires Aerojet Rocketdyne for $4.4 billion

As part of Lockheed Martin, we will combine our advanced technologies with their significant expertise and resources to accelerate the achievement of our common goal: ensuring the protection of our nation and space exploration, Aerojet CEO Eileen Drake said.

Lockheed Martin said it will pay $56 per share for Aerojet Rocketdyne, up 33% from its closing price on December 18, 2020. The purchase price will be reduced to $51 per share after paying a special dividend before closing the deal, Lockheed added.

Lockheed Martin, a Bethesda, Maryland-based company, already uses Aerojet Rocketdyne powerplants in its aeronautics, missile weapons and fire control technology products.

Lockheed Martin said the deal, which must be scrutinized by regulators given the company's lead position in the defense sector, is expected to be completed in the second half of 2021.

Jim Tycleth took over the top job at Lockheed Martin in June 2020 and has already closed a deal to buy Integration Innovation, a hypersonic weapons software and systems maker based in Huntsville, Alabama, by November 2020.^[3]

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