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L3Harris agrees to buy Aerojet Rocketdyne

Aerojet Rocketdyne provides solid rocket motor boosters and other products for hypersonics. (Aerojet Rocketdyne artist concept)

US defence contractor L3Harris Technologies plans to expand its weapons and space portfolio by acquiring US propulsion manufacturer Aerojet Rocketdyne for USD4.7 billion in cash, the two companies announced late on 18 December.

L3Harris chairand CEO Christopher Kubasik said his company would gain a “crucial national asset” in Aerojet Rocketdyne, whose products are used in missiles and launch vehicles. Aerojet Rocketyne CEO and president Eileen Drake said her business would gain access to “substantial expertise and resources” by joining a larger company like L3Harris.

Aerojet Rocketdyne shareholders would receive USD58 per share, or a premium of about 5.7% over their stock's 16 December closing price. The company, which generated net sales of USD2.2 billion in 2021, would become a new standalone segment alongside L3Harris' Communication Systems, Integrated Mission Systems, and Space & Airborne Systems business segments.

L3Harris expects to close the deal in 2023, after receiving approval from regulators and Aerojet Rocketdyne shareholders. It would gain about 5,000 employees, boosting its workforce to more than 50,000 people.

The announcement came about 10 months after US defence contractor Lockheed Martin abandoned plans to acquire Aerojet Rocketdyne amid opposition from the Federal Trade Commission (FTC). The FTC argued that the Lockheed Martin takeover could have reduced competition in the missile market because Lockheed Martin manufactures missiles and Aerojet Rocketdyne is the last independent provider of missile propulsion. L3Harris, by contrast, is not a major player in missiles.

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