Global security and aerospace company Lockheed Martin will acquire U.S. rocket engine manufacturer Aerojet Rocketdyne Holdings for $4.4 billion in a deal that will include Aerojet’s debt and net cash.
The purchase, Lockheed’s biggest since its current CEO Jim Taiclet took over in June will enhance its propulsion capabilities as competitors like SpaceX and Blue Origin continue to gain astronomically-priced space contracts with the U.S. government.
In his statement to the media, Mr. Taiclet stated that “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.”
Sharing his comments on the deal, Aerojet CEO Mr. Eileen Drake remarked that “As part of Lockheed Martin, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration.”
Maryland-based longtime US contractor Lockheed which has been using Aerojet Rocketdyne’s propulsion systems in its aeronautics, missiles and fire control offerings will pay Aerojet $56 for its every share, a 33 percent premium to the rocket engine manufacturer’s latest closing price.
Lockheed expected the deal to be closed by the second half of 2021 once US regulators clear the transaction after scrutinizing given the firm’s leading position in the defense sector.
Mr. Taiclet who took the chief executive job in June swiftly closed out a deal by November where the firm bought Alabama-based hypersonic weapon software and systems maker Integration Innovation Inc which allowed the firm to expand its capabilities to design, develop and product integrated hypersonic weapon systems for its customers.