Lockheed Martin to buy rotorcraft maker Sikorsky

Lockheed’s strategic review, meanwhile, will focus on alternatives for its government IT and technical services businesses.

The programs represent roughly $6 billion in estimated 2015 annual sales and more than 17,000 employees, the firm said.

United Technologies and Lockheed officials declined comment.

United Technologies Corporation (UTC) has agreed to sell its helicopter manufacturing subsidiary Sikorsky to Lockheed for USD9 billion, it was announced on 20 July.

The price has been effectively dropped to about $7.1 billion, after taking into account tax benefits resulting from the transaction.

Lockheed Martin’s portfolio grew today, as the company paired its earnings report with the announcement of an acquisition.

Subject to regulatory approvals and customary closing conditions and adjustments, the transaction is scheduled to be completed by the first quarter of 2016.

The combination of Lockheed and Sikorsky will most likely be scrutinized by the U.S. Defense Department, which has indicated that it wants to preserve competition among military contractors.

If the sale is approved by regulators, the helicopter maker would move out of its Connecticut-based ownership for the first time since 1929, four years after it was founded.

“Sikorsky’s acquisition by Lockheed Martin, one of the world’s leading aerospace and defense companies, will ensure it remains a technology leader at the forefront of vertical lift”, Hayes said.

“Also good news is that Lockheed Martin is committed to both the military and commercial helicopter business”.

David Cadden, professor emeritus in the School of Business at Quinnipiac University in Hamden, weighed in on the deal, saying, “It would appear that Lockheed Martin is actively committed to being in the defense industry”.

It is buying Sikorsky from rival United Technologies, which said earlier in the year it meant to dispose of Sikorsky through a stock market flotation or a trade sale. In April, the company announced plans to cut 1,100 jobs – more than 12 percent of its workforce – including up to 700 in Texas. A few years ago, at least, Milwaukee was the hub for Sikorsky’s aviation component repairs, including helicopters.

Sikorsky also makes presidential helicopters and its aircraft have returned astronauts home after they splashed down in the Pacific Ocean at the end of their space travels. Last year, Sikorsky won the contract to build the next generation of Marine One helicopters, which are used to transport the president.