Lockheed to buy Black Hawk maker Sikorsky for $9 billion
By Andrea Shalal
WASHINGTON (Reuters) - Lockheed Martin Corp said Monday it would buy Black Hawk maker Sikorsky Aircraft from United Technologies Corp for $9 billion, cementing Lockheed's dominance in weapons making.
Lockheed will also review the possible sale or spin off of $6 billion in other information technology and services businesses.
The Pentagon's largest supplier called Sikorsky a "national icon" and said the net cost of the deal was around $7.1 billion, taking into account tax benefits. Lockheed also reported higher earnings and revenue for the second quarter.
The deal, first reported by Reuters on Sunday, also opens key foreign markets for Lockheed, which has annual revenues of $45 billion. It already dwarves its nearest competitors, the defense business of Boeing Co and Northrop Grumman Corp.
It comes just months after UTC said it would explore alternatives for Sikorsky, which it has owned since 1929 and which accounted for $7.5 billion in sales last year out of total UTC revenues of $65 billion.
This is Lockheed's largest acquisition since it bought Loral Corp's defense electronics business for $9.1 billion in 1996, and its $10 billion merger with Martin Marietta in 1994.
It marks the first major strategic move for both United Tech CEO Greg Hayes, who was elevated from finance chief in November, and Lockheed CEO Marillyn Hewson, who took her job in January 2013.
The two sides wrapped up key aspects of the deal late last week before Hewson jetted off to an annual UK air show, the Royal International Air Tattoo. Hewson returned in time for a telephone board meeting on Sunday evening that endorsed the deal, according to sources familiar with the process. Continued...