(Reuters) – Lockheed Martin Corp. said on Sunday it had agreed to buy US rocket engine maker 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 executive director in June. It is looking to strengthen the company’s propulsion capabilities amid competition from new entrants, such as SpaceX and Blue Origin, for space contracts with the U.S. government.
“The acquisition of Aerojet Rocketdyne will preserve and strengthen an essential component of the national defense industrial base and reduce costs for our customers and U.S. taxpayers,” Taiclet said in a statement.
“As part of Lockheed Martin, we will bring together our advanced technologies with their experience and substantial resources to accelerate our shared purpose: to enable the defense of our nation and space exploration,” said Eileen Drake, CEO of Aerojet , 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 payment of a special dividend prior to closing, Lockheed added.
The Bethesda, Maryland-based company already uses Aeroet Rocketdyne propulsion systems in its aeronautical, missile and fire control offering.
Lockheed said the transaction, which will be controlled by regulators given the company’s leading position in the defense sector, is expected to close in the second half of 2021.
Taiclet took the first job at Lockheed in June and closed a deal here to buy Integration Innovation Inc., a hypersonic weapons systems and software maker based in Huntsville, Alabama, in November.
Mike Stone reports to Washington, DC; Edited by Greg Roumeliotis and Diane Craft