Lockheed Martin expects to close $9 bn acquisition of Sikorsky Aircraft this week
04 Nov 2015
US defence contractor Lockheed Martin Corp today said it expects to close its $9-billion acquisition of Sikorsky Aircraft on Friday after having received the final regulatory approval from China.
''Lockheed Martin has received the final regulatory approval needed to close its acquisition of Sikorsky Aircraft, a world leader in military and commercial rotary-wing aircraft, from United Technologies Corp (UTC),'' the Maryland-based company said in a statement.
''The completion of the regulatory review by the ministry of commerce of the People's Republic of China marks the end of a successful and comprehensive regulatory review process in eight jurisdictions,'' the statement added.
"With this final regulatory approval, we are one step closer to completing this historic acquisition," said Lockheed Martin chairman, president and CEO, Marillyn Hewson.
In July this year Lockheed Martin struck a deal to buy Sikorsky Aircraft from UTC for $9 billion (See: Lockheed Martin acquiring Sikorsky Aircraft from UTC for $9 bn)
The acquisition is the biggest by Lockheed since its $10-billion purchase of Martin Marietta in 1995, and also the biggest aerospace purchase after the 2012 acquisition of Goodrich by UTC for more than $16 billion.
UTC, the Connecticut-based aerospace and industrial giant, had earlier said that after conducting a strategic review, it has decided to either spin off or sell Sikorsky.
UTC's decision to sell Sikorsky comes amidst demand for helicopters weakening due to falling oil prices that have led to cost cutting in the oil and gas industry, as well as the US government scaling down the defence budget.
The Sikorsky deal would see Lockheed further strengthening its position as the world's largest defence contractor and US regulators approved the deal since Lockheed does not make helicopters itself and plans to align Sikorsky under the Lockheed Martin Mission Systems and Training (MST) business segment.
MST and Sikorsky currently partner on a number of critical programs, including the VH-92 Presidential Helicopter, Combat Rescue Helicopter and the Naval MH-60 Helicopter.
Founded in Long Island, New York by Russian immigrant aircraft designer Igor Sikorsky in 1925, Sikorsky is the leading manufacturer of military and commercial helicopters.
Sikorsky helicopters are used by all branches of the US armed forces, along with military services and commercial operators in 40 nations.
Core US military production programmes are based on the Sikorsky H-60 aircraft, the Black Hawk helicopter for the US Army and Seahawk helicopter for the US Navy.
Over the past five years, the Pentagon has awarded $18 billion for Sikorsky helicopters, parts and services, making the company the leading rotorcraft provider to the US defence.
The Stratford, Connecticut–based company has more than 15,000 employees and posted sales of $7.5 billion last year.
Sikorsky has a joint venture in India with Tata Advanced Systems for producing S-92 helicopter cabins and more than 5,000 aerospace components at two manufacturing facilities in Hyderabad.
Lockheed Martin is a global security and aerospace company manufacturing F-35 fighter jets, naval ships and high-end government satellites.
The company employs around 112,000 people posted net sales of $45.6 billion last year.