Exclusive: Lockheed to buy United Tech's Sikorsky for over $8 billion
By Andrea Shalal and Lewis Krauskopf
WASHINGTON (Reuters) - Lockheed Martin Corp (LMT.N: Quote) has agreed to buy United Technologies Corp's (UTX.N: Quote) Sikorsky Aircraft for over $8 billion, two sources said on Sunday, cementing a deal that would confirm Lockheed's dominance in weapons making and giving the Black Hawk helicopter to the maker of the F-35 fighter jet.
The deal will add further heft to Lockheed, which already has annual revenues of around $45 billion and dwarves its nearest competitors, the defense business of Boeing Co (BA.N: Quote) and Northrop Grumman Corp (NOC.N: Quote).
It will make Lockheed less reliant on the $391 billion F-35 fighter jet business, while expanding its overseas sales by adding Sikorsky's iconic Black Hawk helicopters to a product line that already spans everything from satellites to naval ships.
The two companies plan to announce the deal on Monday before both report second-quarter results on Tuesday, said the sources, who were not authorized to speak publicly.
It will be Lockheed's largest acquisition since it bought Martin Marietta Corp for about $10 billion two decades ago. It is the first major strategic move for both United Tech Chief Executive Officer Greg Hayes, who was elevated to CEO from finance chief in November, and Lockheed CEO Marillyn Hewson, who took her job in January 2013.
United Technologies and Lockheed officials declined comment.
Textron Inc (TXT.N: Quote), parent of Bell Helicopter, had submitted a bid for Sikorsky, but dropped out of the bidding after the price rose, according to several sources familiar with the matter. Both helicopter makers have seen revenues drop due to lower demand from the oil and gas sector.
Pentagon officials last week said they would carefully evaluate any sale of Sikorsky, saying it was important to the department to maintain competition and avoid market distortions. Continued...