Lockheed Martin to Buy Sikorsky Aircraft for US$8 Billion

The two companies plan to announce the deal on Monday before both report second-quarter results on Tuesday, said the source, who was not authorized to speak publicly.

With a deal, the Bethesda, Md.-based Lockheed Martin would add the largest maker of military helicopters to a lineup that includes warplanes and missiles, with United Technologies opting for the sale over a possible spinoff to shareholders.

Officials at United Technologies and Lockheed declined comment.

Sikorsky is the manufacturer of the Black Hawk helicopter and presidential Marine One helicopter.

Combined with Sikorsky, Lockheed will dwarf the defense businesses of its nearest competitors, Boeing Co and Northrop Grumman Corp, although the company is seeking to shed some of its lower-margin services businesses, sources said. The company said the cuts were due to declining demand for shuttling workers to offshore oil platforms.

Last week, Pentagon officials said they would carefully evaluate any sale of Sikorsky Aircraft, the US military’s largest helicopter supplier, Reuters reported.

Industry executives have long predicted further consolidation in the United States defense market after a massive contraction in the 1990s after the Cold War.

Sikorsky employs 8,000 workers in Connecticut…

UTC, the Connecticut-based aerospace and industrial giant, had last month said that after conducting a strategic review, it has chose to either spin off or sell Sikorsky.

Analysts point out this deal is Lockheed’s biggest acquisition since it snapped up Martin Marietta for $10 billion twenty years ago.

Lockheed Martin and Sikorsky Aircraft have already cooperated in several projects, primarily the naval Anti Submarine and Surface Warfare (ASuW) MH-60R program for the US Navy.