What is the primary strategic rationale behind Lockheed Martin's acquisition of Aerojet Rocketdyne?

Lockheed Martin is acquiring Aerojet Rocketdyne to strengthen its position in critical space, defense, and advanced technology markets. Aerojet Rocketdyne's expertise in specialized power and propulsion systems, including solid and liquid rocket propulsion and hypersonic engines, is highly complementary to Lockheed Martin's existing missile defense, strategic deterrence, and space programs.

What is the total value of the transaction and how will Lockheed Martin finance it?

The acquisition values Aerojet Rocketdyne at $56.00 per share in cash. However, Aerojet Rocketdyne will pay a special dividend of $5.00 per share before the closing, reducing the effective cash payment by Lockheed Martin to $51.00 per share. Lockheed Martin plans to fund this acquisition using a combination of its existing cash reserves and the issuance of new debt.

What are the key conditions for the completion of this acquisition?

The completion of the merger is subject to several conditions. These include the approval of the transaction by Aerojet Rocketdyne's stockholders, as well as the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, indicating that regulatory approval, particularly from antitrust authorities, is a critical step.

What is the timeline for the closing of the acquisition?

The Merger Agreement specifies an outside closing date of December 21, 2021. This date can be extended to March 21, 2022, if all closing conditions are met except for the receipt of necessary competition and other regulatory approvals. This suggests that regulatory review could be a significant factor in the deal's timeline.

LMT 8-K: Material Agreements & Regulation FD

Summary

Lockheed Martin Corporation (LMT) has announced a significant strategic move by entering into an Agreement and Plan of Merger to acquire Aerojet Rocketdyne Holdings, Inc. The proposed acquisition is structured as a merger where Aerojet Rocketdyne will become a wholly owned subsidiary of Lockheed Martin. This acquisition aims to enhance Lockheed Martin's capabilities in critical space, defense, and advanced technology sectors by integrating Aerojet Rocketdyne's specialized power and propulsion systems expertise. Key to this transaction for investors is the purchase price, which will amount to $56.00 per share in cash, subject to a potential reduction to $51.00 per share after a special cash dividend of $5.00 per share to Aerojet Rocketdyne shareholders. Lockheed Martin plans to finance the acquisition through a combination of existing cash reserves and new debt. The deal is contingent upon customary closing conditions, including approval from Aerojet Rocketdyne's stockholders and regulatory clearance, notably under the Hart-Scott-Rodino Act, signaling potential antitrust review.

Key Highlights

1Lockheed Martin (LMT) to acquire Aerojet Rocketdyne Holdings, Inc. for $56.00 per share in cash.
2The acquisition is structured as a merger, making Aerojet Rocketdyne a wholly owned subsidiary of Lockheed Martin.
3Aerojet Rocketdyne is a key supplier of propulsion systems for LMT's strategic programs, including PAC-3, THAAD, and Next Generation Interceptor.
4Lockheed Martin expects to fund the $56.00 per share acquisition with a mix of cash on hand and new debt.
5The deal is subject to Aerojet Rocketdyne shareholder approval and antitrust clearance (Hart-Scott-Rodino Act).
6Aerojet Rocketdyne will pay a special cash dividend of $5.00 per share to its shareholders prior to closing, reducing the effective cash payment from LMT to $51.00 per share.
7The transaction is expected to close by December 21, 2021, with a potential extension to March 21, 2022, depending on regulatory approvals.

LOCKHEED MARTIN CORP 8-K Report, Material Agreement (Dec 21, 2020)

Summary

Key Highlights

Frequently Asked Questions