Lockheed Martin is proposing to merge with Aerojet Rocketdyne, one of the two remaining producers of rocket engines in the U.S. On balance, the combination would be good for America’s military. First, it would preserve competition in a vital sector where suppliers have been disappearing. Second, Aerojet is sure to be bought by somebody, and a different kind of buyer could do damage to the defense industrial base. Third, there is a relevant precedent in the 2018 merger of Northrop with Orbital ATK from which lessons can be learned about how to implement such a merger. Fourth, remedies for any competitive concerns are readily available. Fifth and finally, the Lockheed-Aerojet transaction would reduce costs, encourage innovation, and give the Pentagon more options for the future. I have written a commentary for Forbes here.
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