Aerojet Rocketdyne test-fires a solid rocket motor. (Aerojet Rocketdyne)
Lockheed Martin has abandoned its proposed takeover of propulsion manufacturer Aerojet Rocketdyne, citing efforts by the US Federal Trade Commission (FTC) to derail the USD4.4 billion deal.
“Our planned acquisition of Aerojet Rocketdyne would have benefitted the entire industry through greater efficiency, speed, and significant cost reductions for the US government,“ Lockheed Martin chairman, president, and CEO James Taiclet said on 13 February. “However, we determined that in light of the FTC's actions, terminating the transaction is in the best interest of our stakeholders.”
Since unveiling its proposed purchase over a year ago, Lockheed Martin has argued that bringing the propulsion provider in-house would make designing and building missiles and rockets more efficient. However, the FTC sued to block the transaction in late January, saying the combination could reduce competition in the missile market because Aerojet Rocketdyne is the last independent provider of missile propulsion in the United States.
Although Lockheed Martin could have chosen to oppose the lawsuit, it might have faced an uphill battle, as the FTC unanimously supported the lawsuit despite being evenly split between Democratic and Republican commissioners.
Aerojet Rocketdyne, which supported becoming part of Lockheed Martin, indicated it is prepared to continue as a standalone company.
“We are confident in our future performance with an impressive backlog that is more than three times the size of our annual sales and a strong macroeconomic environment underpinning our portfolio,” Aerojet Rocketdyne said.