Lockheed Martin terminates agreement to acquire Aerojet Rocketdyne (Image Credit: SNN)
CEO James Taiclet: ‘We determined that in light of the FTC’s actions, terminating the transaction is in the best interest of our stakeholders’
WASHINGTON — Lockheed Martin announced Feb. 13 it has decided to terminate a $4.4 billion deal to acquire rocket engine manufacturer Aerojet Rocketdyne.
The decision comes less than three weeks after the Federal Trade Commission filed a lawsuit to block the acquisition. Lockheed Martin in December 2020 announced its intent to buy Aerojet Rocketdyne, the last independent U.S. supplier of missile propulsion systems.
The FTC last month voted 4-0 to to seek an injunction to block the transaction on antitrust grounds, arguing that the deal would give Lockheed the ability to “cut off other defense contractors from the critical components they need to build competing missiles.”
Aerojet Rocketdyne supplies power, propulsion and armament systems used in missiles made by Lockheed Martin and other defense prime contractors.
“We determined that in light of the FTC’s actions, terminating the transaction is in the best interest of our stakeholders,” Lockheed Martin’s president and CEO James Taiclet said in a statement.
He insisted that the deal would “would have benefitted the entire industry through greater efficiency, speed, and significant cost reductions for the U.S. government.”
In the complaint filed Jan. 25, the FTC said that “without competitive pressure, Lockheed can jack up the price the U.S. government has to pay, while delivering lower quality and less innovation. We cannot afford to allow further concentration in markets critical to our national security and defense.”
Analysts since the FTC announced its decision had predicted Lockheed Martin would abandon the merger agreement rather than fight the U.S. government in court.
Aerojet Rocketdyne in a statement Feb. 13 said the company is pressing forward as a independent company.
“We are 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,” Aerojet said. The company said it will reveal details about its financial performance and strategy Feb. 17 in its fourth-quarter earnings report.