The world’s largest defense contractor is making big changes to its business mix as it announces plans to buy the Sikorsky helicopter unit of United Technologies and review $6 billion in services businesses for possible divestiture. Lockheed Martin Chairman & CEO Marillyn Hewson announced the changes Monday morning, describing Sikorsky as a good fit with her company’s aerospace and defense franchises, while explaining the strategic review of the services portfolio as a necessary response to changing market conditions. Over time, substitution of Sikorsky’s rotorcraft integration and sustainment revenues for commodity IT and other low-margin services could materially improve Lockheed’s financials, enabling the company to continue increasing shareholder value. I have written a commentary for Forbes here.
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