Defense contractor Lockheed Martin announced its intent to stop an attempted acquisition of a company that develops missiles weeks after the Federal Trade Commission filed a lawsuit to prevent the sale.
The company announced on Sunday that it was no longer looking to acquire Aerojet Rocketdyne Holdings. The sale Lockheed Martin had in place was for $4.4 billion.
“Our planned acquisition of Aerojet Rocketdyne would have benefited the entire industry through greater efficiency, speed, and significant cost reductions for the U.S. government,” said Lockheed Martin Chairman, President, and CEO James Taiclet.
FTC SUES TO BLOCK LOCKHEED MARTIN ACQUISITION OF COMPANY THAT MAKES MISSILES SYSTEM
“However, we determined that in light of the FTC’s actions, terminating the transaction is in the best interest of our stakeholders,” he added. “We stand by our long heritage as a merchant supplier and trusted partner and will continue to support Aerojet Rocketdyne and other essential suppliers in the Defense Industrial Base still overcoming the challenges of the pandemic.”
FTC Bureau of Competition Director Holly Vedova called Aerojet the country’s “last independent supplier of key missile inputs” at the time of the legal filing last month, and the FTC argued that should the sale go through, Lockheed Martin would own a company that provides key technology to Lockheed Martin. The company then could refuse to sell to or upcharge other companies.
It would “give Lockheed the ability to cut off other defense contractors from the critical components they need to build competing missiles,” Vedova explained. “Without competitive pressure, Lockheed can jack up the price the U.S. government has to pay while delivering lower quality and less innovation.”
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Following Lockheed’s announcement terminating the deal, Aerojet put out a statement noting that it is “poised to deliver substantial value to our shareholders driven by our continued leadership in key space exploration and defense growth markets, including by advancing hypersonics and strategic, tactical and missile defense systems.”
