Lockheed Martin, already far and away the world's biggest military contractor, has announced an agreement to purchase Sikorsky Aircraft for $9 billion. Sikorsky, presently owned by United Technologies, is best known for its Black Hawk military helicopters. As The New York Times reports, last month United Technologies signaled its interest in selling off Sikorsky, which posted $7.5 billion in sales for 2014, sometime this year. Reuters was first to break news of the deal on Sunday.
But the deal could meet significant scrutiny from the US Defense Department, which has aimed to maintain a healthy landscape of competition when doling out military contracts. With Lockheed's increasing stature and influence, keeping any sort of balance in place may get more challenging. The company already manufacturers a slew of military fighter jets like the F-35 — plus intelligence systems — and blows away its closest competitors with annual revenues that average $45 billion.
"Together, we’ll offer a strong portfolio of helicopter solutions to our global customers and accelerate the pace of innovation and new technology development," said Marillyn Hewson, Lockheed Martin's chairman, president, and CEO. If the deal overcomes that regulatory approval process and successfully closes, Sikorsky will be moved under the company's Mission Systems and Training business. Lockheed expects the deal to close by the first quarter of 2016 at the latest, and says it's effectively paying only $7.1 billion after tax benefits related to the big purchase.
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