Antitrust regulators will likely lengthen their investigation into Lockheed Martin Corp’s proposed purchase of rocket maker Aerojet Rocketdyne Holdings Inc, industry executives said, since the deal would give the No. 1 defense contractor ownership of a vital piece of the U.S. missile industry.
The $4.4 billion dollar deal, announced late last year, has raised eyebrows because Lockheed would take over a company that produces 70% of the solid fuel rocket motors and other propulsion products used in everything from antiballistic missiles, to air-to-air missiles.
On Thursday the chief executive of one of Aerojet’s biggest customers, Raytheon Technologies Corp, said his company would speak with anti-trust regulators because they have “concerns” about the deal.
“If that merger actually happens, you don’t have an independent supplier in the solid rocket motor side,” Greg Hayes said at the Barclay’s Industrial Select Conference on Wednesday. Hayes said, “we’re going to make our concerns known to [antitrust enforcers]and the Department of Defense, and we’ll see how this whole thing plays out.” The Federal Trade Commission is reviewing the deal for the government, the people said.
Lockheed competes against Raytheon when it sells tactical missiles, often fired from jets, to the Pentagon.
Lockheed’s CEO, Jim Taiclet, said the deal could put Lockheed into a strong position in the growing propulsion and hypersonic weapons market.
Still, Taiclet has said Lockheed would simultaneously remain a partner to Aerojet’s current customer base by “providing outstanding propulsion products for the entire industry.”
The merger, announced on Dec. 20, is in its 60-day antitrust review period that expires at midnight Thursday and is widely expected be extended by the FTC, allowing the agency more time for review.
Lockheed has anticipated the deal could take until the second half of the year to close.
Source: Reuters.com