Lockheed Martin Acquires Aerojet Rocketdyne for $4.4B

Lockheed Martin (LM), the leading defense contractor in the United States, is set to purchase Aerojet Rocketdyne (AR), a prominent manufacturer of rocket engines and missile systems, in a transaction valued at $4.4 billion, encompassing debt and net cash. This acquisition will expand Lockheed Martin’s involvement in the fields of space technology and hypersonic systems. This development occurs within a landscape of growing competition within the aerospace and defense sectors.

According to a company announcement, this planned acquisition will significantly enhance Lockheed Martin’s expertise in propulsion technology. Aerojet Rocketdyne’s technologies are already integral to Lockheed Martin’s existing supply network. The company currently utilizes Aerojet Rocketdyne’s propulsion systems across its range of aeronautics, missile, and fire control products.

Aerojet Rocketdyne reported revenues of approximately $2 billion in 2019. Based in El Segundo, California, the company employs close to 5,000 individuals and was established in 2013 through the combination of Aerojet, a division of GenCorp, and Pratt & Whitney Rocketdyne. The company’s product line includes solid rocket motors, alongside tactical and strategic missiles designed for the Department of Defense.

Aerojet Rocketdyne manufactures the RL10 rocket engine, which provides power to the upper stage of the Delta 4 and Atlas 5 launch vehicles operated by United Launch Alliance. Additionally, the company produces the RS-25 engines utilized in NASA’s Space Launch System.

This strategic move aims to bolster Lockheed Martin’s propulsion capabilities, enabling it to effectively compete with emerging companies like SpaceX and Blue Origin in securing space-related contracts from the U.S. government. Simultaneously, Raytheon is progressing towards a merger with United Technologies Corp., which will result in the formation of a major aerospace and defense organization.

James Taiclet, CEO of Lockheed Martin, stated: “The acquisition of Aerojet Rocketdyne will safeguard and reinforce a vital element of the nation’s defense industrial base, while also lowering expenses for our clients and American taxpayers.”

Eileen Drake, CEO of Aerojet Rocketdyne, commented: “Becoming a part of Lockheed Martin will allow us to integrate our cutting-edge technologies with their extensive expertise and resources, furthering our common goal of defending our country and advancing space exploration.”

The completion of this acquisition is anticipated in the latter portion of 2021, contingent upon standard regulatory approvals and the consent of Aerojet Rocketdyne’s shareholders.