WASHINGTON — Lockheed Martin announced Sunday its controversial attempt to acquire Aerojet Rocketdyne is officially over.
The cancellation, announced by Lockheed Sunday evening as the Super Bowl began, came almost three weeks after the U.S. Federal Trade Commission announced a lawsuit that sought to block the proposed $4.4 billion merger on antitrust grounds. The FTC sought a preliminary injunction to put it on hold pending a June administrative trial.
The FTC said last month it was concerned the deal would hurt competition in the defense industry by allowing Lockheed to cut other contractors off from vital missile components Aerojet provides, particularly scramjet engines for hypersonic missiles and control systems for missile interceptors.
Although Lockheed pledged to keep allowing Aerojet to sell propulsion equipment to other firms, the FTC expressed its doubts in its complaint and said Lockheed had already tried to block competition before the acquisition.
“Our planned acquisition of Aerojet Rocketdyne would have benefitted the entire industry through greater efficiency, speed, and significant cost reductions for the U.S. government,” Lockheed chief executive Jim Taiclet said in Sunday’s release. “However, we determined that in light of the FTC’s actions, terminating the transaction is in the best interest of our stakeholders.”
Aerojet said in its own release it would continue working on hypersonic and missile defense systems after the deal’s termination.
The proposed acquisition was first announced in December 2020, and quickly drew controversy. Raytheon Technologies publicly objected to it, saying it would force Raytheon to negotiate with Lockheed, a major competitor, for solid rocket motors. Sen. Elizabeth Warren, D-Mass., also questioned the deal and called for the FTC to take a close look at it.
Still, a bipartisan group of 13 lawmakers in August 2021 sent a letter backing the acquisition to Deputy Secretary of Defense Kathleen Hicks, calling it “in both our national security interests and the U.S. taxpayers’ best interest.” They said the merger would restore competitive balance to the industry after Northrop Grumman’s acquisition of Orbital ATK.
Stephen Losey is the air warfare reporter at Defense News. He previously reported for Military.com, covering the Pentagon, special operations and air warfare. Before that, he covered U.S. Air Force leadership, personnel and operations for Air Force Times.