Lockheed Martin to buy maker of Black Hawk

Defense conglomerate Lockheed Martin Corporation (NYSE:LMT) is set to announce it has purchased United Technologies Sikorsky Aircraft for approximately $8 billion, according to knowledgeable sources, Reuters reports.

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

Textron Inc. had submitted a bid for Sikorsky, but dropped out of the bidding after the price rose, according to several sources familiar with the matter, according to Reuters. Of interest, Lockheed Martin reported over $45 billion in sales in 2014. The demand for military and civil helicopters has softened in recent years, primarily due to reduction in demand from the military and offshore operators in the oil and gas business.

In June, it said it would exit the helicopter business and sell or spin off Sikorsky, which expects slower revenue growth and has lower profit margins than other UTC divisions.

Pentagon officials will need to approve the takeover because they can object to any merger involving its key suppliers.

Pentagon officials last week said they would carefully evaluate any sale of Sikorsky Aircraft, the US military’s largest helicopter supplier, and it was important to the department to maintain competition and avoid market distortions.

Sikorsky has a joint venture in India with Tata Advanced Systems for producing S-92 helicopter cabins and more than 5,000 aerospace components at two manufacturing facilities in Hyderabad.

Lockheed also said Monday it will conduct a “strategic review of alternatives” for its government information-technology and technical services business.