Lockheed terminates Aerojet merger

By Briana Reilly / February 13, 2022 at 7:29 PM

Lockheed Martin has opted to terminate its planned $4.4 billion acquisition of Aerojet Rocketdyne following the Federal Trade Commission's recent lawsuit seeking to block the merger.

The decision, released by Lockheed in the midst of the Super Bowl on Sunday evening, was made after executives determined not going to court to defend the deal “is in the best interest of our stakeholders,” company CEO James Taiclet said in the press release.

Pledging to continue supporting Aerojet “and other essential suppliers” overcoming COVID-19-related challenges, Taiclet added Lockheed “will maintain our focus on the most effective use of capital with the highest return on investment, including our ongoing commitment to return value to shareholders.”

In its own company statement, Aerojet, which makes advanced missile propulsion systems and supplies them to prime contractors, pointed to the “substantial value” executives are ready to deliver to shareholders through “leadership in key space exploration and defense growth markets, including by advancing hypersonics and strategic, tactical and missile defense systems.”

“We are confident in our future performance with an impressive backlog that is more than three times the size of our annual sales and a strong macroeconomic environment underpinning our portfolio,” the statement continued.

In announcing its lawsuit last month, the FTC expressed concern the merger could give Lockheed “control over critical propulsion inputs that its rivals require to compete.”

“Without competitive pressure, Lockheed can jack up the price the U.S. government has to pay, while delivering lower quality and less innovation,” Holly Vedova, the FTC’s Bureau of Competition head, said in a statement at the time. “We cannot afford to allow further concentration in markets critical to our national security and defense.”