L3Harris Technologies plans to acquire Aerojet Rocketdyne for US$4.7 billion. Based in California, Aerojet Rocketdyne manufactures rocket engines and propulsion systems for the defence and space industries, including the RS-25 engines for NASA’s Space Launch System (SLS), and generates around US$2.3 billion in annual revenue. In comparison, Florida-based L3Harris, a major aerospace and defence contractor in the US, recorded US$17 billion in annual revenue in 2021.
L3Harris has agreed to pay US$58 per share for Aerojet in an all-cash transaction that will include issuing new debt to help fund it. The acquisition is expected to close this year, assuming regulatory clearance.
“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said L3Harris.
An Aerojet Rocketdyne engineer examines RS-25 engine, which will be used for Artemis III, the third flight of NASA’s Space Launch System. Courtesy: Aerojet Rocketdyne
Its CEO and chair, Christopher E. Kubasik, said: “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”
The takeover bid by L3Harris comes two years after an earlier attempt by Lockheed Martin to acquire Aerojet for US$4.4bn, which only ended in February last year after antitrust regulators blocked the sale.
