US FTC blocks Lockheed Martin $4.4 billion acquisition
The acquisition of Aerojet could affect the supply chain of missiles, such as this 34" common hypersonic missile pictured during a static fire test. (Photo: US Navy)
Lockheed Martin has responded to the news that the US FTC is suing to block its acquisition of Aerojet Rocketdyne Holdings.
The US Federal Trade Commission (FTC) sued to block Lockheed Martin’s proposed $4.4 billion acquisition of Aerojet Rocketdyne Holdings on 25 January.
Aerojet Rocketdyne Holdings is the last independent US supplier of missile propulsion systems, which are critical components for the missiles made by all US defence companies.
Aerojet and only one other competitor, Northrop Grumman, currently compete to provide solid rocket motors for missile systems, hypersonic cruise missiles and supersonic combustion ramjets.
Moreover, Aerojet is the only proven US supplier of divert-and-attitude control systems that propel missile defence kill vehicles.
The FTC alleges that if the acquisition was to take place, then Lockheed would gain a monopoly on the missile supply chain and potentially limit supply to its competitors.
Holly Vedova, Director of the FTC Bureau of Competition, commented: ‘Without competitive pressure, Lockheed can jack up the price the US government has to pay’.
This concern is particularly relevant as the US is currently undergoing an arms race for better missile technology with China and Russia.
Lockheed Martin responded to Shephard, declining to comment on the pending litigation but stating: ‘We are reviewing the FTC’s complaint and will respond in due course.’
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