Lockheed Martin disclosed on Sunday that it plans to acquire Aerojet Rocketdyne, pending shareholder and regulatory approvals. Unlike some other mergers in the aerospace sector, this deal is likely to bolster competition. There are only two domestic producers of the large solid rocket motors used on long-range missiles and launch vehicles. Northrop Grumman’s acquisition of Orbital ATK two years ago raised questions about whether Aerojet might be squeezed out of the market for large solids. What Aerojet needed was a partner with financial resources comparable to those of Northrop, and that’s what the proposed transaction delivers. Aerojet makes a wide range of propulsion products for the military and civilian space market, but staying viable in large solids is crucial to its viability. Lockheed Martin has done itself and the nation a favor by moving to assimilate this remarkable enterprise. Aerojet may not be big, but it is vital to America’s tech base. I have written a commentary for Forbes here.
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