Four Aerojet Rocketdyne RS-25 engines attached to the core Stage for NASA’s Space Launch System rocket.
NASA
The Federal Trade Commission on Tuesday moved to block Lockheed Martin‘s planned acquisition of Aerojet Rocketdyne, which makes rocket engines and spacecraft propulsion, filing a lawsuit to stop the deal.
“The agency’s complaint alleges that if the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defense contractors and further consolidate multiple markets critical to national security and defense,” the FTC said in a news release.
Earlier on Tuesday, both Lockheed and Aerojet warned shareholders of the FTC lawsuit. Shares of Aerojet Rocketdyne dropped as much as 15% in trading from its previous close of $45.
The defense giant in December 2020 announced its intention to buy Aerojet at a $4.6 billion equity valuation. The deal was expected to close in the second half of last year, but the FTC’s review delayed the transaction to this month.
Lockheed is Aerojet’s largest customer, making up about 33% of its sales. United Launch Alliance, or ULA, makes up another 10% of Aerojet’s sales – a further complement to Lockheed Martin, which owns a 50% stake in ULA as a joint venture with Boeing.
During Lockheed’s fourth quarter earnings conference call on Tuesday, CEO Jim Taiclet said the merger agreement with Aerojet allows for a 30-day review period following the filing of a lawsuit to decide whether to defend or terminate the deal. If the FTC’s lawsuit does go to court, the trial is scheduled to begin on June 16.
