BY Fraser Tennant
Blaming efforts by the US Federal Trade Commission (FTC) to block the acquisition, global security and aerospace company Lockheed Martin Corporation has terminated its agreement to buy rocket engine maker Aerojet Rocketdyne Holdings, Inc. in a $4.4bn deal.
The cancellation of the transaction comes three weeks after the FTC announced a lawsuit that sought to block the proposed merger on antitrust grounds – a preliminary injunction that would have put the deal on hold pending an administrative trial in June.
The regulatory agency stated a concern that the proposed deal would hurt competition in the defence industry by allowing Lockheed to cut other contractors off from vital missile components Aerojet provides, particularly scramjet engines for hypersonic missiles and control systems for missile interceptors.
"Our planned acquisition of Aerojet Rocketdyne would have benefitted the entire industry through greater efficiency, speed and significant cost reductions for the US government," said James Taiclet, chairman, president and chief executive of Lockheed Martin. "However, we determined that in light of the FTC's actions, terminating the transaction is in the best interest of our stakeholders.”
Headquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 114,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
"Moving forward, we will maintain our focus on the most effective use of capital with the highest return on investment, including our ongoing commitment to return value to shareholders,” added Mr Taiclet. “We remain confident in our company's strong foundation and growth potential as several exciting projects enter production.”
In a statement following the termination of the merger agreement, Aerojet said that it is was “poised to deliver substantial value to its shareholders, driven by its continued leadership in key space exploration and defence growth markets, including by advancing hypersonics and strategic, tactical and missile defence systems”.
Headquartered in El Segundo, California, Aerojet Rocketdyne is an innovative technology-based manufacturer of aerospace and defence products and systems, with a real estate segment that includes activities related to the entitlement, sale and leasing of the company’s excess real estate assets.
Mr Taiclet concluded: “We will continue to support the US and its allies through our industry leadership and developing the technologies to ensure effective threat deterrence for decades to come."
News: Lockheed scraps $4.4 billion deal to buy Aerojet amid regulatory roadblocks