L3Harris moves to acquire Aerojet Rocketdyne

2022.12.19 3 min read

WASHINGTON — L3Harris, the country’s sixth largest defense contractor, plans to acquire propulsion expert Aerojet Rocketdyne in a deal valued at $4.7 billion, the two companies announced Sunday.

The move comes after Lockheed Martin ended its acquisition effort in February.

L3Harris said it would pay $58 per share in an all-cash deal to acquire the defense contractor, which specializes in propulsion systems and energetics. Aerojet, which generates about $2.3 billion in annual revenue, has facilities in California, Arkansas, Florida, Alabama and Washington, among other states.

Two years ago, Lockheed announced it would acquire Aerojet, but the deal quickly drew controversy. Raytheon Technologies publicly objected, saying the transaction 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 examine it.

In early 2022, the U.S. Federal Trade Commission announced a lawsuit that sought to block the proposed $4.4 billion merger on antitrust grounds. The FTC said it was concerned the deal would hurt competition in the defense industry by allowing Lockheed to cut off other contractors from vital missile components Aerojet provides, particularly scramjet engines for hypersonic missiles and control systems for missile interceptors.

Weeks later, Lockheed announced it would no longer seek to acquire Aerojet. In a statement, Jim Taiclet, Lockheed’s chief executive said the company “determined that in light of the FTC’s actions, terminating the transaction is in the best interest of our stakeholders.”

L3Harris has dramatically reshaped itself in recent years. In 2019, L3 Technologies and Harris merged into what became the seventh-largest defense firm in the world at the time. The company, with $14.9 billion in 2021 revenue, was the 10th largest defense firm in this year’s rankings. Aerojet’s nearly $1.5 billion in defense revenue ranked 65th on this year’s Defense News Top 100 list.

In its announcement Sunday, L3Harris and Aerojet said the deal “will ensure the defense industrial base and our customers will have a strengthened merchant supplier to effectively address both current and emerging threats — and promote scientific discovery and innovation — through targeted investment in advanced missile technologies, hypersonics and more.”

The deal is slated to close in 2023 and requires regulatory approvals.

Stephen Losey contributed to this report.

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