Lockheed Martin purchase Sikorsky for $9 billion

“The addition of the unit will be seen as a complementary piece to Lockheed Martin’s defense business, which counts the F-35 fighter jet in its product stable, and will deepen Lockheed Martin’s footprint as the largest defense contractor”, Briefing.com said.

Sikorsky “is a natural fit”, and will enable Lockheed Martin to expand its “core business” into the $30 billion annual military and commercial rotary wing industry, Hewson said.

Sikorsky and Lockheed have partnered on a number of programs, including the VH-92 presidential helicopter, combat rescue helicopter and the Naval MH-60 helicopter.

United Technologies is expected to use the transaction proceeds to fund additional share repurchase to reduce the impact on earnings related to the sale.

Sikorsky makes the multi-service and multi-national H-60 Hawk line of helicopters, meaning the combined company will have a major share of the Pentagon’s business for military aircraft over the next decades.

With Lockheed Martin’s net sales for 2014 reported as $45.6 billion, the global security and aerospace company headquartered in Bethesda, Maryland offers a competitive advantage in the market.

“Operations will continue as they do today – with Lockheed Martin and Sikorsky employees working side-by-side to deliver these critical capabilities to our customers”, Lockheed Martin spokesman Dan Nelson told USNI News on Monday.

Sikorsky, a unit of United Technologies Corp., announced last month that 160 full-time workers and 560 contractors would be laid off in Coatesville over the next 12 months.

At the same time that it announced on Monday that it would buy Sikorsky from the United Technologies Corp., Lockheed also said that it would consider spinning off or selling much of its business that provides information technology services to government agencies.

A Connecticut-based aircraft manufacturing corporation, Sikorsky develops a variety of aircrafts but has been noted for their development of the Black Hawk helicopter.

Lockheed Martin has entered into an agreement to acquire Sikorsky Helicopters for USA billion with $1.9 billion in account tax benefits. Sikorsky is one of the largest suppliers of military helicopters to the US Air Force.

The acquisition is subject to customary conditions, including securing regulatory approvals. For Lockheed, it has plenty of positive growth drivers already in the portfolio, notably the F-35, and it does not need Sikorsky – but it could be a business that is nice to have.