(Reuters) – Lockheed Martin Corp said on Sunday it has agreed to buy US rocket engine manufacturer Aerojet Rocketdyne Holdings Inc for $ 4.4 billion, including debt and net cash.
The deal is Lockheed’s largest acquisition since Jim Taiclet took over as CEO in June. He’s trying to bolster the company’s propulsion capacity amid competition from new entrants like SpaceX and Blue Origin for space contracts with the US government.
“The acquisition of Aerojet Rocketdyne will maintain and strengthen a vital part of the domestic defense industrial base and reduce costs for our customers and the US taxpayer,” Taiclet said in a statement.
“As part of Lockheed Martin, we will bring together our advanced technologies with their substantial expertise and resources to accelerate our shared goal of enabling the defense of our country and space exploration,” Aerojet CEO Eileen Drake said in a statement.
Lockheed said it will pay $ 56 per share for Aerojet Rocketdyne, a 33 percent premium over Friday’s closing price. The purchase price will be reduced to $ 51 per share upon the payment of a pre-closing special dividend, Lockheed added.
The Bethesda, Maryland-based company already uses Aerojet Rocketdyne’s propulsion systems in its aerospace, missile and fire control offering.
Lockheed said the transaction, which will be investigated by regulators, given the company’s leadership position in the defense sector, is expected to close in the second half of 2021.
Taiclet took the top job at Lockheed in June and struck a deal here by November to purchase Integration Innovation Inc., a Huntsville, Alabama-based maker of hypersonic weapon software and systems.
Reporting by Mike Stone in Washington, DC; Editing by Greg Roumeliotis and Diane Craft