Lockheed Martin agreed to acquire the defense industry supplier Aerojet Rocketdyne Holdings in a deal valued at $4.4 billion.
CEO Jim Taiclet, who stepped into the top job this year, has said he was keen to expand the world’s largest defense contractor through acquisitions.
With El Segundo, Calif.-based Aerojet, he’s picking up a key U.S. supplier of propulsion systems for missiles, rockets and other space and defense applications.
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base,” Taiclet said in the statement.
Lockheed has been scouting for deals.
In January, the company said it was flush with cash and open to deals as rival Raytheon Co. prepared to combine with United Technologies Corp. — parent company of Cedar Rapids-based Collins Aerospace — to create an aerospace-and-defense powerhouse.
Lockheed has been seeking opportunities to “bring in the technologies faster into the company that we think are going to be crucial for the future,” Taiclet said during its October earnings call.
“So we plan to be active, but we also plan to be very, very prudent.”
The Aerojet transaction is expected to close in the second half of 2021 after obtaining regulatory approvals and a nod from Aerojet’s shareholders.
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Lockheed’s space division is its third-largest business, contributing 18 percent of its 2019 revenue.
The company competes with Elon Musk’s SpaceX for U.S. government rocket launches through the United Launch Alliance, its joint venture with Boeing.