Lockheed Martin to Buy Sikorsky Aircraft for $9 Billion

Lockheed Martin has agreed the deal for Sikorsky Aircraft, a division of United Technologies, and an announcement is expected today, according to Reuters.

The U.S. Defense Department can object to a merger involving its key suppliers during a federal antitrust review, which in this case could be led by the U.S. Justice Department.

Keep in mind that Pentagon officials have already said they planned to carefully evaluate any potential sale of Sikorsky Aircraft, as it supplies a large number of military helicopters to the US military, and the department had a responsibility to maintain competition and minimize market distortions.

Sikorsky is the manufacturer of the Black Hawk helicopter and presidential Marine One helicopter. The divestiture is driven by Sikorsky’s slow growth prospects in the view of Greg Hayes, who became the UTC chief executive late past year.

Hartford-based UTC said in June that it would either sell the helicopter maker, based in Stratford, or spin the business off to shareholders in a tax-free transaction.

Lockheed Martin describes itself on its website as a “global security and aerospace company that employs about 112,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services”.

UTC could use the funds for other large acquisitions, although the CEO has said the high valuations of targets have made potential transactions expensive.

“It’s a great business for them to own”.

Together those programs account for about $6 billion in estimated 2015 sales, Lockheed said in a statement.