Lockheed to buy Sikorsky
July 20, 2015
On Monday, Lockheed confirmed that it would purchase Sikorsky Aircraft from United Technologies Corp for $9 billion in cash, confirming media reports from over the weekend.
Lockheed's portfolio includes the F-35 fighter jet, satellites and naval ships, but the company does not produce helicopters. Buying Sikorsky, known for the Black Hawk and the combat rescue helicopter used by US presidents, flown under the call sign Marine One, would help Lockheed rely less on its $391 billion F-35 business.
Lockheed chief executive Marillyn Hewson said: "I'm confident this acquisition will help us extend our core business into the growing areas of helicopter production and sustainment."
The acquisition is expected to close by year-end or in the first quarter of 2016.
Regulatory approval
It will be Lockheed's largest acquisition since it bought Martin Marietta Corp for about $10 billion two decades ago. Regulatory approval is expected because Lockheed does not make helicopters. A fusion would therefore not violate any antitrust rules.
Pentagon officials said last week they would carefully evaluate any sale of Sikorsky Aircraft, the U.S. military's largest helicopter supplier, and it was important to the department to maintain competition and avoid market distortions.
United Technologies said in June that it planned to shed Sikorsky, either through a sale or spinoff. The company wants to focus on high-technology systems and services for the aerospace and building industries.
While Lockheed intends to fund the sale with cash on hand and new debt issuances, United Technologies said it plans to use the sale's proceeds for additional stock buybacks.
sri/cjc (AP, AFP, Reuters, dpa)