The US Federal Trade Commission (FTC) said on Tuesday it will challenge in court Lockheed Martin’s attempt to acquire the last independent missile propulsion systems manufacturer, Aerojet Rocketdyne Holdings, in a deal worth $4.4 billion.
“Today, in its first outright challenge to a defense merger in decades, the Federal Trade Commission sued to block Lockheed Martin Corporation’s $4.4 billion proposed vertical acquisition of Aerojet Rocketdyne Holdings Inc, the last independent U.S. supplier of missile propulsion systems,” the FTC said in a press release.
The FTC is concerned that should Lockheed Martin proceed with the deal, the world’s largest defense contractor will use its control over Aerojet to harm rival defense contractors, including Raytheon Technologies, Inc., Northrop Grumman and Boeing by denying or limiting their access to critical propulsion inputs for various weapons systems.
Aerojet is the last independent supplier of critical inputs for missile systems, hypersonic cruise missiles, and missile defense kill vehicles, as well as the only proven US supplier of divert-and-attitude control systems that propel missile defense kill vehicles, the release said.
The FTC is planning to file an administrative complaint with the US District Court for the District of Columbia, seeking a preliminary injunction to block the deal. The administrative trial is scheduled to begin on June 16, the release said.
Lockheed’s Takeover
Lockheed Martin had earlier announced plans to buy Aerojet Rocketdyne for $4.4 billion, according to a statement on the company’s website.
“@LockheedMartin is acquiring @AerojetRdyne, strengthening its position as a leading provider of technologies to deter threats and help secure the US and its allies,” the company wrote on its Twitter account.
CEO James Taiclet said that the deal would strengthen the US defense industrial base and reduce the costs of Lockheed Martin’s production.
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” Taiclet said.
According to the statement, the company expects the deal to be finalized in the second half of 2021, but will require regulatory approval to come into force.
Founded in 1995, Lockheed Martin is one of the largest US manufacturers of space and military technologies. The company is planning to launch its first manned spacecraft to the Moon in 2024. The integration with Aerojet Rocketdyne, which developed the RS-25 rocket engines, will allow the company to develop in-house rocket engine technologies.
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