FTC sues to block Lockheed’s purchase of supplier Aerojet

WASHINGTON – Federal regulators are suing to dam Lockheed Martin Corp.’s $4.4 billion bid for Aerojet Rocketdyne Holdings, saying it could restrict competitors and drive up costs for parts utilized in missiles that Lockheed and different protection contractors construct for the Pentagon.

The Federal Commerce Fee mentioned Tuesday that Aerojet is the final impartial U.S. provider of some key missile components, and the acquisition would let Lockheed reduce off provide to rival.

Lockheed mentioned it was reviewing the lawsuit however had no additional rapid remark.

Lockheed’s missile opponents embrace Raytheon Applied sciences, Northrop Grumman and Boeing. The weapons they provide to the Pentagon depend upon rocket motors constructed by Aerojet, the fee mentioned. The motors go into area rockets and missiles resembling hypersonic weapons for the Pentagon.

“With out aggressive strain, Lockheed can jack up the worth the U.S. authorities has to pay, whereas delivering decrease high quality and fewer innovation,” mentioned Holly Vedova, director of the FTC’s competitors bureau. “We can’t afford to permit additional focus in markets essential to our nationwide safety and protection.”

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Lockheed, primarily based in Bethesda, Maryland, introduced the deal for Aerojet in December 2020, shortly earlier than the tip of the Trump administration.

The FTC mentioned it reviewed the Pentagon’s evaluation as a part of its overview of the deal earlier than submitting the lawsuit.

Shares of Aerojet, primarily based in El Segundo, California, fell 18.6% on Tuesday, whereas Lockheed’s rose 3.7%.

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This story has been up to date to appropriate that the motion was taken by the FTC, an impartial federal regulatory company, not the Biden administration.