FTC to file suit vs LM's Aerojet buy

The U.S. Federal Trade Commission will file a preliminary injunction complaint with the U.S. District Court for the District of Columbia seeking a Preliminary Injunction to block Lockheed Martin Corporation’s $4.4B proposed acquisition of Aerojet Rocketdyne, the last independent U.S. supplier of missile propulsion systems. FTC’s complaint alleges if the deal proceeds, Lockheed will use its control of Aerojet to harm rival defense contractors and consolidate multiple markets critical to national security and defense. It’s FTC’s first litigated defense merger challenge in decades. The Defense Department reviewed the acquisition and considered potential impacts on national security, the nation’s industrial and technological base, competition, and innovation. DoD facilitated a series of FTC-led interviews with defense-impacted stakeholders. DoD’s assessment was provided to the FTC for its deliberations and final decision-making. Lockheed is the world’s largest defense contractor and a leading missile supplier in a highly concentrated sector. Among Lockheed’s competitors are Raytheon Technologies, Northrop Grumman, and Boeing. The acquisition would also harm the U.S. government because the cost of missile systems, missile defense kill-vehicles, and hypersonic cruise missiles would likely increase, innovation lessened, and quality reduced, hindering national security and defense interests, the agency indicated. The FTC will file the complaint to stop the pending deal in an administrative trial, which is scheduled to begin June 16. The FTC issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. (Source: FTC media release 01/25/22) Gulf Coast Note: Lockheed Martin has operation facilities in Mississippi at Stennis, Biloxi and Meridian. Lockheed has six sites in Louisiana: New Orleans (3), Metairie, Houma and Baton Rouge. Aerojet Rocketdyne has Gulf state sites in Stennis, Miss., and Huntsville, Ala. FTC Sues to Block Lockheed Martin Corporation’s $4.4 Billion Vertical Acquisition of Aerojet Rocketdyne Holdings Inc. | Federal Trade Commission