Here’s everything about Lockheed Martin Aerojet Rocketdyne Acquisition in $4.4 Billion!

  • POSTED ON: 21/Dec/2020

Lockheed Martin inks $4.4 billion!

Lockheed Martin Corp, world’s leading defense contractor, announced on Sunday that it has inked a $4.4 billion deal to acquire Aerojet Rocketdyne, missile and Rocket Engine Manufacturer Company.

This acquisition marks Lockheed’s biggest acquisition deal since Jim Taichel was appointed as CEO in June this year. He is eyeing towards enhancing the company’s propulsion performance in view of the arrival of new companies in the space market, such as Blue Origin and SpaceX, which are owned by the world’s two richest men Elon Musk and Jeff Bezos.

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“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” said Taichlet, CEO of Lockheed Martin Corp in a statement.

The deal also marks the latest merge of space industry giants since Northrop Grumman’s acquisition of Orbital ATK for $7.8 billion in 2017.

Eileen Drake, Aerojet’s CEO said in a statement, “As part of Lockheed Martin, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration.”

Aerojet Rocketdyne holds $2 billion worth of capital and has some 5,000 employees working around the country. The company is in contract with NASA (give powering idea to NASA and win $5 Million) to manufacture rocket engines, such as RS-25, which are used in NASA’s Space Launch System rocket. The same engine is already used in propulsion systems in multiple Lockheed’s defense systems.

Lockheed manufactures the Orion spacecraft that flies on top of the Space Launch System (SLS) rocket. This acquisition provides Lockheed with a stake in the rocket industry, which is originally created by Boeing. 

Maryland-based Lockheed, Bethesda is spending $56 for each share, 33% higher than the Friday closing price of Aerojet Rocketdyne’s stocks. The final price will drop to $51 for each share that will be given when the acquisition finalizes. The deal is expected to conclude during the second half of the upcoming year.

With this acquisition, Chief Executive Jim Taiclet is looking forward to expanding the world’s biggest defense contractor, as he picked up a major U.S supplier of propulsion systems for rockets, missiles, and other defense and space mechanisms.

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Lockheed has been exploring deals since the start of this year. In January, the company expressed its interest towards signing new deals, following the collaboration of its rival Raytheon Co. with United Technologies Corp. to produce an aerospace-and-defense powerhouse. Lockheed has been rooting for opportunities to bring new technologies into the company that they deemed as crucial for the company’s future growth and development.

With this merge, Lockheed’s takes on Elon Musk’s SpaceX head-to-head for space contracts from U.S government through the United Launch Alliance, its joint project with Boeing Co.

The deal is subjected for approval from Aerojet Rocketdyne’s stockholders and other regulators. A transition team will be created to look after the company’s integral operations.

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Updated 2020-12-21 at 13:28:33


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