Lockheed Martin, which had expected to finish its acquisition of propulsion manufacturer Aerojet Rocketdyne in the fourth quarter of 2021, disclosed on 26 October that it forecasts it will complete the transaction in the first quarter of 2022.
The US defence contractor did not give a specific reason for the delay; however, it indicated that the USD4.4 billion deal remains in the regulatory approval process. The Federal Trade Commission is leading the US government's multi-agency review of the proposed acquisition.
Lockheed Martin unveiled the deal in December 2020, saying it wants to bring the propulsion provider in-house to make designing and building missiles and rockets more efficient. Critics, including Raytheon Technologies, contend that the combination could make it difficult for Lockheed Martin's competitors to buy Aerojet Rocketdyne products.
Lockheed Martin provided the acquisition update while releasing its latest financial results. Net sales declined 2.8% to USD16 billion in the third quarter of 2021 partly because of the Covid-19 pandemic's impact on suppliers. Vendors that support both commercial aviation and defence are experiencing the most financial hardship, said John Mollard, Lockheed Martin's acting chief financial officer.
Lockheed Martin continued to accelerate payments to its suppliers to help them weather the Covid-19 pandemic. “Frankly, there is an element of self-preservation here,” Mollard told analysts. “We need our supply chain to be successful for us to be successful.”
Despite the third-quarter sales decrease, Lockheed Martin's business segment operating profit rose 5% to USD1.9 billion. However, its net earnings fell 63.8% to USD614 million because of a pension-related charge.
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