(Reuters) – Lockheed Martin Corp said on Sunday it had agreed to buy US missile engine maker Aerojet Rocketdyne Holdings Inc for $ 4.4 billion, including debt and net cash.
The deal is Lockheed’s biggest acquisition since Jim Taiclet took over as chief executive in June. It seeks to strengthen the company’s propulsion capabilities amid competition from new entrants, such as SpaceX and Blue Origin, for space contracts with the US government.
“The acquisition of Aerojet Rocketdyne will preserve and strengthen an essential component of the internal defense industry base and reduce costs for our customers and the American taxpayer,” Taiclet said in a statement.
“As part of Lockheed Martin, we will bring our advanced technologies along with their expertise and substantial resources to accelerate our common goal: enabling our nation’s defense and space exploration,” Aerojet CEO Eileen Drake said in a statement.
Lockheed said it will pay $ 56 per share for Aerojet Rocketdyne, a 33% premium over Friday’s closing price. The purchase price will be reduced to $ 51 per share after paying a special pre-closing dividend, Lockheed added.
The Bethesda, Maryland company already uses Aerojet Rocketdyne’s propulsion systems in its aeronautics, missile and fire control offerings.
Lockheed said the transaction, which is to be reviewed by regulators, given the company’s leadership position in the defense sector, is expected to be completed in the second half of 2021.
Taiclet took over at Lockheed in June and signed a contract to buy Integration Innovation Inc., a hypersonic weapons software and systems manufacturer in Huntsville, Alabama, until November.
Mike Stone’s report in Washington, DC; Editing by Greg Roumeliotis and Diane Craft