Defense contractor Lockheed Martin announced plans to halt an attempted acquisition of a company that develops missiles weeks after the Federal Trade Commission filed a lawsuit to block the sale.
The company announced on Sunday that it was no longer seeking to acquire Aerojet Rocketdyne Holdings. The sale that Lockheed Martin had put together was for $4.4 billion.
“Our proposed acquisition of Aerojet Rocketdyne would have benefited the entire industry through greater efficiency, greater speed and significant cost reductions for the U.S. government,” said the Chairman and CEO. of Lockheed Martin, James Taiclet.
FTC LAWSUIT TO BLOCK LOCKHEED MARTIN’S ACQUISITION OF COMPANY THAT MANUFACTURES MISSILE SYSTEM
“However, we have determined that in light of the actions of the FTC, terminating the transaction is in the best interests of our stakeholders,” he added. “We maintain our long tradition as a merchant supplier and trusted partner and will continue to support Aerojet Rocketdyne and other critical defense industrial base suppliers as they continue to overcome the challenges of the pandemic.”
FTC Competition Bureau Director Holly Vedova called Aerojet the nation’s “last independent supplier of key missile inputs” at the time of the legal filing last month, and the FTC argued that if the sale were to materialize, Lockheed Martin would own a company that would supply keys. technology to Lockheed Martin, which could then refuse to sell or overtax other companies.
This “would give Lockheed the ability to cut other defense contractors off critical components they need to build competing missiles,” Vedova explained. “Without competitive pressure, Lockheed can raise the price the US government has to pay while delivering quality and less innovation.
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Following Lockheed’s announcement of the termination of the agreement, Aerojet issued a statement stating that it is “poised to deliver substantial value to our shareholders through our continued leadership in key growth in space exploration and defense, including advancing hypersonics and strategic, tactical and missile defense systems.”