Lockheed Martin, Textron emerge as finalists to buy Sikorsky
09 Jul 2015
Lockheed Martin Corp and Textron Inc have emerged as final suitors to buy the Sikorsky Aircraft unit from United Technologies Corp (UTC), Reuters today reported, citing people familiar with the matter.
UTC is weighing offers from the two companies and may come to a decision by the end of the month, the report said.
UTC, the Connecticut-based aerospace and industrial giant, may decide against an outright sale and instead spin off Sikorsky to shareholders in a tax-free deal, the report added.
Last month UTC said that after conducting a strategic review, it decided to either spin off or sell Sikorsky Aircraft.
"Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies," Gregory Hayes, UTC president and CEO had said. "Sikorsky is the world's premier helicopter company and through a series of strategic wins is well positioned for long-term growth.''
"However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses. Over the coming weeks, we'll determine whether a spinoff or direct sale is the best way to enhance Sikorsky's long-term success and create the most value for customers and shareholders," he added.
UTC's decision to sell Sikorsky comes amid demand for helicopters is 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 defence budget.
A sale of Sikorsky Aircraft, the maker of Black Hawk helicopter, could fetch United Technologied around $8 billion, say analysts.
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.
Sikorsky also has been making helicopters for the US President in collaboration with Lockheed.
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.
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.
