America’s largest defense contractor, Lockheed Martin, has just gotten bigger.
The move comes amid the context of increasing competition in the space and defense industries.
James Taiclet, Lockheed Martin’s president and CEO, said the acquisition gives the company a larger footprint in space and hypersonic technology.
He said Aerojet Rocketdyne’s propulsion systems already are key components of Lockheed Martin’s supply chain across several business areas, Space News reported.
“The proposed acquisition adds substantial expertise in propulsion to Lockheed Martin’s portfolio,” the company said in a news release.
The Bethesda, Maryland-based company already uses Aerojet Rocketdyne’s propulsion systems in its aeronautics, missiles and fire control offerings.
Lockheed Martin’s space division has its hand in programs ranging from Orion and Mars missions to its collaboration with Jeff Bezos’ Blue Origin space venture on a proposed lunar lander, its work on national security satellites and its half-interest (with Boeing) in United Launch Alliance, GeekWire reported.
Aerojet Rocketdyne’s 2019 revenues were approximately US$2 billion. The company, headquartered in El Segundo, California, has nearly 5,000 employees.
The company was formed in 2013 when GenCorp’s Aerojet and Pratt & Whitney Rocketdyne were merged, Space News reported.
Aerojet Rocketdyne’s portfolio of large rocket engines includes the RL10 that powers the upper stage of ULA’s Delta 4 and Atlas 5 launch vehicles.
Aerojet Rocketdyne also produces the RS-25 engines for NASA’s Space Launch System and it’s working to qualify a new version called RL10C-X that will include major components built using 3-D printing technology, Space News reported.
The company won a Pentagon contract in 2016 to develop a new rocket engine called AR1 that was positioned to compete to be the main engine of ULA’s new Vulcan launch vehicle but ULA in September 2018 ended up selecting Blue Origin’s BE-4.
Lockheed Martin’s acquisition of Aerojet Rocketdyne is expected to close in the second half of 2021. It is subject to approvals by regulators and Aerojet Rocketdyne’s stockholders.
“We are pleased to bring together our complementary companies in a transformative transaction that will provide premium cash value for our shareholders and tremendous benefits for our employees, customers and partners,” Eileen Drake, Aerojet Rocketdyne’s CEO and president, said in a news release.
The move comes as it attempts to increase its propulsion capabilities to compete with new entrants such as SpaceX and Blue Origin for space contracts, Tech Crunch reported.
Meanwhile, rival Raytheon is preparing to combine with United Technologies to create an aerospace-and-defense giant.
Sources Space News, Tech Crunch, Reuters, GeekWire