Yahoo by Darrell Etherington 1/25/2022
The U.S. Federal Trade Commission (FTC) has filed suit to block the pending deal defense and aerospace giant Lockheed Martin has on the table to acquire Aerojet Rocketdyne. The proposed deal has a total value of $4.4 billion, made up of cash and debt, but the U.S. trade regulation agency argues that the combination of the two companies would provide Lockheed Martin with leverage it could use "to harm rival defense contractors and further consolidate multiple markets critical to national security and defense."
Aerojet Rocketdyne supplies key systems, including rocket and missile engines, to a number of major defense contractors, and it's one of very few with the expertise and scale to act as a subcontractor specifically in the area of propulsion system components aimed at missile and hypersonic cruise missile production (the other is Northrop Grumman). The FTC complaint also points out that Aerojet is "the only proven U.S. supplier" of control systems for another crucial area of defense: vehicles designed to intercept and kill enemy missiles.
Not only is the FTC concerned that Lockheed picking up Aerojet could reduce competition in the supply chain for crucial defense components, but it also raises the possibility that the supplier would have access to information that, following closure of the deal, Lockheed may have reason to make unfair use of.
More:
https://finance.yahoo.com/finance/news/ftc-sues-block-lockheed-martins-163443340.html
