The US Federal Trade Commission (FTC) is seeking to block Lockheed Martin’s proposed acquisition of missile propulsion systems supplier Aerojet Rocketdyne.
In January last year, Lockheed Martin announced its plans to aquire Aerojet Rocketdyne for $4.4bn.
The FTC fears the deal would ‘harm’ Lockheed’s rival defence contractors, and considerably ‘lessen competition’ in several markets for critical national defence products.
Based in El Segundo, California, Aerojet is an independent supplier of advanced power, propulsion, and armament systems for missiles and hypersonic cruise missiles.
In addition, the company is the only proven supplier of divert-and-attitude control systems that powers missile defence kill vehicles in the US.
The move marks the FTC’S first litigated defence merger challenge in decades.
The agency will seek a preliminary injunction to the US District Court, for the District of Columbia to block the deal.
The deal, which is subject to regulatory approval, is pending an administrative trial, which is scheduled to take place on 16 June 2022.
FTC Bureau of Competition director Holly Vedova said: “The FTC is suing to block Lockheed Martin, the world’s largest defence contractor, from eliminating Aerojet, our nation’s last independent supplier of key missile inputs.
“Lockheed is one of a few missile middlemen the US military relies on to supply vital weapons that keep our country safe. If consummated, this deal would give Lockheed the ability to cut off other defence contractors from the critical components they need to build competing missiles.
“Without competitive pressure, Lockheed can jack up the price the US government has to pay, while delivering lower quality and less innovation. We cannot afford to allow further concentration in markets critical to our national security and defence.”
Last year, Aerojet announced that it had completed the full-scale static test firing of a second stage propulsion system as part of the DARPA OpFires programme.
