Lockheed Martin acquires Sikorsky for US$9bn

20 Jul 2015

The Sikorsky Sea Hawk helicopter

In what has to be one of the biggest M&A deals in the aviation sector for some time, Lockheed Martin has acquired Sikorsky Aircraft, maker of the famous Black Hawk military helicopters, for US$9bn.

Lockheed Martin – maker of the F-35 fighter jet – will gain a considerable edge against competitors Boeing and Northrop Grumman.

This is Lockheed’s largest acquisition since it acquired the Martin Marietta Corp for US$10bn two decades ago.

The move also makes Lockheed Martin less reliant on sales of its F-35 fighters.

“Sikorsky is a natural fit for Lockheed Martin and complements our broad portfolio of world-class aerospace and defence products and technologies,” said Marillyn Hewson, Lockheed Martin chairman, president and CEO.

“I’m confident this acquisition will help us extend our core business into the growing areas of helicopter production and sustainment. Together, we’ll offer a strong portfolio of helicopter solutions to our global customers and accelerate the pace of innovation and new technology development.”

Black Hawk owned

The deal will have to get regulatory approval in the US and is expected to close by Q1 2016.

As well as the Black Hawk military helicopter, Sikorsky also manufactures the VH-92 Presidential Helicopter, Combat Rescue Helicopter and the Naval MH-60 Helicopter.

Separately, Lockheed Martin will conduct a strategic review of alternatives for its government IT and technical services businesses, primarily in the information systems and global solutions business segment and a portion of the missiles and fire control business segment. The programmes to be reviewed represent roughly US$6bn in estimated 2015 annual sales and more than 17,000 employees.

“As global security market dynamics shift, this review will strengthen our competitive posture, enabling sustained, profitable growth and positioning Lockheed Martin to deliver value for customers, shareholders and employees,” Hewson said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years