Summary
The Boeing Company (BA) and Lockheed Martin Corporation announced on May 2, 2005, the formation of a joint venture to own and operate their U.S. Government expendable launch vehicle (ELV) businesses. This new entity, to be named United Launch Alliance, will combine the capabilities of Boeing's Delta rockets and Lockheed Martin's Atlas rockets, focusing exclusively on serving U.S. Government launch needs. Each company will hold a 50% ownership stake and contribute its respective ELV assets and liabilities. This strategic move aims to consolidate expertise, streamline operations, and potentially enhance efficiency in the government space launch sector. Importantly, the joint venture will not include commercial launch services from either company's International Launch Services or Boeing Launch Services divisions. These commercial operations will continue independently, with exclusive marketing rights for Atlas and Delta launch services to commercial customers granted to Boeing Launch Services and International Launch Services, respectively, for ten years post-closing. The agreement also includes a significant non-competition clause for U.S. Government ELV services, a settlement of existing litigation between the two companies concerning a previous Air Force contract, and a defined management structure led by executives from both parent companies.
Key Highlights
- 1Boeing and Lockheed Martin are forming a 50/50 joint venture for their U.S. Government expendable launch vehicle (ELV) businesses, combining Delta and Atlas rocket capabilities.
- 2The joint venture, named United Launch Alliance (ULA), will focus solely on U.S. Government launch services.
- 3Commercial launch services (International Launch Services, Boeing Launch Services, Sea Launch, Proton) are excluded from the joint venture.
- 4Both companies will grant exclusive 10-year marketing rights for their respective ELV services to commercial customers through their separate commercial divisions.
- 5A non-competition provision restricts both companies from competing in the U.S. Government ELV market for 7.5 years post-closing.
- 6The agreement includes a settlement and dismissal of pending litigation between Boeing and Lockheed Martin related to the Air Force Evolved ELV program.
- 7The transaction is subject to customary closing conditions, including regulatory approvals (Hart-Scott-Rodino) and potential governmental review from the Department of Defense or NASA.