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As part of the deal, $56 per share will be paid to Aerojet Rocketdyne. Also, after the pre-closing special dividends have been paid by the company, Lockheed will only pay $51 per share as the purchase price.
Aerojet Rocketdyne Holdings Inc (NYSE: AJRD), a US rocket engine manufacturer, has been acquired by Lockheed Martin Corp (NYSE: LMT) in a deal worth $4.4 billion according to multiple reports. Moreover, the $4.4 billion includes both debt and net cash.
Jim Taiclet took over Lockheed as a Chief Executive in June 2020, and this acquisition is said to be the biggest since he came to the scene. Interestingly, Lockheed is already in active engagement with Aerojet Rocketdyne as it uses its propulsion systems in its constant work of fire control offering, missiles, and aeronautics.
Taiclet in his response to the deal stated that the new development will reduce costs to their customers and the American taxpayer.
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer, ” he said.
In terms of scoring good points to earn space contracts from the US government, Lockheed has encountered stiff competition from the likes of Blue Space LLC and SpaceX or Space Exploration Technologies. Taiclet, since taking over has, therefore, sought to strengthen its propulsion capabilities to stand tall among its competitors.
As part of the deal, $56 per share will be paid to Aerojet Rocketdyne. Also, after the pre-closing special dividends have been paid by the company, Lockheed will only pay $51 per share as the purchase price. The closing special dividends will be paid on 24 March 2021. This will be paid to holders of common shares as of 10 March 2021.
Eileen Drake, the CEO of Aerojet in a statement confirmed the agreement and said that the two companies will accelerate their shared purpose as they join the team in a great collaboration. They expect that their technological addition to the expertise and resources of Lockheed will go a long way to achieve the goals of the company and make them the best in the industry.
Eileen also expressed a deep appreciation to the team and their effort in achieving this milestone, stating that the recent acquisition is evidence of the world-class organization as well as the team they have built.
The conclusion of the deal is subject to satisfaction of customary closing conditions and is expected to be completed in the second half of next year. Also, a transition team will be formed to ensure that the integration will be a smooth one, and the employees, customers, and stakeholders will go through an uninterrupted continuity process.
Lockheed was founded in 1926, and In 1995, it merged with Martin Marietta. It is an American Defense, Security, Arm, and Aerospace Company, with interests spread across the world. 78% of its revenue in 2013 came from military sales. As of January 2020, the company had around 110,000 employees.