FTC regulators and DoD proceed to overview the proposed merger
WASHINGTON — Christopher Kubasik, CEO of L3Harris Applied sciences, mentioned Jan. 27 regulators proceed to overview the corporate’s proposed $4.7 billion acquisition of Aerojet Rocketdyne and expects the merger to shut in 2023.
L3Harris, headquartered in Melbourne, Florida, is a worldwide protection and aerospace agency with greater than $17 billion in annual income. In December it announced an settlement to purchase Aerojet Rocketdyne, a Sacramento, California-based producer of rocket engines and propulsion techniques for house autos, ballistic missiles and navy tactical weapons.
Throughout a fourth-quarter earnings call, Kubasik mentioned the corporate has been answering questions from Federal Commerce Fee antitrust regulators. He mentioned L3Harris executives have met with Pentagon officers to handle questions on the acquisition of Aerojet Rocketdyne and its potential impression on protection packages.
Kubasik didn’t touch upon a recent letter sent by Sen. Elizabeth Warren (D-Mass.) to the Federal Commerce Fee urging the company to dam the transaction. The FTC final yr blocked Lockheed Martin’s proposed $4.4 billion bid for Aerojet Rocketdyne, arguing that the mixture would give Lockheed — a significant provider of tactical missiles — the flexibility to “reduce off different protection contractors from the essential parts they should construct competing missiles.”
L3Harris mentioned it doesn’t anticipate to face these identical challenges as a result of the mixture with Aerojet could be a “horizontal move” somewhat than a vertical integration of a missile producer and a key provider of propulsion techniques.
If the acquisition is accepted, Kubasik mentioned, there aren’t any plans to shut main amenities however he estimates about $50 million in overhead value financial savings in the course of the first yr. “We each have places of work in D.C. We each have places of work in Huntsville. There’s some low hanging fruit there,” he mentioned.
This may be L3Harris’ second of two back-to-back acquisitions. Earlier this month the corporate closed a nearly $2 billion buy of Viasat’s tactical knowledge hyperlinks enterprise.
“We bought TDL completed in 92 days, and the mixing is already underway, so we will concentrate on getting Aerojet Rocketdyne accepted, after which begin the mixing,” mentioned Kubasik.
“I don’t foresee us doing any acquisitions for a few years, as you’ll think about,” he advised analysts. “There’s some non-core property that we’re going to promote, and we’re going to make use of these proceeds to deliver down our debt over the following few years.”