Saturday, February 4, 2023

L3Harris Nears $4.7 Billion Deal to Obtain Aerojet Rocketdyne

by IS_Indust

Ten months after Aerojet Rocketdyne Holdings Inc (AJRD.N$4.4 )’s billion sales to Lockheed Martin Corp (LMT.N) fell through, L3Harris Technologies Inc (LHX.N) is close to a $4.7 billion deal to acquire the American rocket manufacturer, according to people with knowledge of the situation on Saturday.

After antitrust authorities filed a lawsuit to stop it, Lockheed Martin backed out of its agreement with Aerojet in February. The company claimed that allowing its biggest client to acquire the El Segundo, California-based company would have had a negative impact on its competitors.

Aerojet’s primary competitor, rather than customer, is the defense contractor L3Harris. L3Harris would be able to grow its space defense systems and precision munitions businesses with the aid of Aerojet’s solid-fuel rocket motors and other propulsion systems.

One of the sources claimed that L3Harris outbid General Electric Co (GE.N) with a $58 per share offer in the closing stages of the sale of Aerojet. The sources also indicated that an agreement might be declared as soon as Monday.

The sources asked to remain anonymous because the information is private. Requests for comment from Aerojet, L3Harris, and General Electric spokespeople were not immediately fulfilled.

The price of the deal is 28% higher than what Aerojet’s shares were trading for on October 24, the last trading day before Reuters reported that the company was considering a sale.

After Orbital ATK Inc. was purchased by Northrop Grumman Corp. (NOC.N) in 2018 for $9.2 billion, Aerojet, the largest manufacturer of propulsion systems in the American defense industry, remained an independent business.

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