18 February 2021
Raytheon raises ‘concerns' about Lockheed Martin deal
by Marc Selinger
Raytheon Technologies fears it could find itself at a competitive disadvantage if rival Lockheed Martin is permitted to buy propulsion provider Aerojet Rocketdyne, a Raytheon official said on 17 February.
Aerojet Rocketdyne, which is based in Los Angeles County, California, makes engines for missiles and rockets. (Credit: Aerojet Rocketdyne)
Raytheon worries that Lockheed Martin could make it difficult for its competitors to buy Aerojet Rocketdyne products. Most of Raytheon’s missiles, including the Standard Missile family, the workhorse Tomahawk cruise missile, and the proposed Next-Generation Interceptor, use Aerojet Rocketdyne propulsion.
“We, obviously, have some concerns about that acquisition,” Raytheon CEO Greg Hayes told the Barclays Industrial Select Conference. “We’re going to make our concerns known to US anti-trust regulators, and the US Department of Defense,” he added.
Lockheed Martin announced in December that it plans to buy Aerojet Rocketdyne for USD4.4 billion. The US government, led by the Federal Trade Commission (FTC), is reviewing the proposed transaction.
Lockheed Martin has asserted that bringing the propulsion provider in-house would make designing and building missiles and rockets more efficient, benefitting its military customers. To address potential regulatory concerns, Lockheed Martin has said that Aerojet Rocketdyne will continue selling its products to other prime contractors.
“We’re going to continue to play fair, and we’re going to be a very effective supplier for all of our defence primes,” Lockheed Martin chief financial officer Ken Possenriede told the Barclays conference.
Lockheed Martin has compared the proposed transaction to rival Northrop Grumman’s purchase of propulsion provider Orbital ATK in 2018, which authorities approved with the caveat that Orbital ATK’s solid-rocket motors remain available to Northrop Grumman’s competitors.
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Raytheon Technologies fears it could find itself at a competitive disadvantage if rival Lockheed Mar...
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