Lockheed Martin to buy Sikorsky Aircraft for $9bn

Sikorsky manufactures a range of military helicopters including Black Hawk and Seahawk

Afp July 20, 2015
File photo shows Marine One, a Sikorsky VH-3D Sea King carrying US President Barack Obama, lands on the South Street heliport on lower Manhattan in New York. PHOTO: AFP

NEW YORK: US defence giant Lockheed Martin said Monday it had agreed to buy Sikorsky Aircraft, maker of Black Hawk helicopters, from United Technologies Corporation for $9 billion in cash.

"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 chief executive, in a statement.

File photo shows the logo of US company Lockheed Martin at Le Bourget Airport during the 46th International Paris Air Show. PHOTO: AFP

Sikorsky manufactures a range of military helicopters, including the Black Hawk, used by 25 nations for multi-mission support, and the Seahawk, used in marine operations. It also makes commercial helicopters and fixed-wing aircraft for surveillance and transport missions.

Sikorsky's Marine One helicopter fleet is used to transport the US president.

Lockheed said the effective cost of the acquisition would be about $7.1 billion because it would be structured as an asset purchase, generating a tax benefit of some $1.9 billion.

The Bethesda, Maryland-based Lockheed said the acquisition was expected to close in late 2015 or early in the first quarter of 2016, contingent on regulatory approvals.

File photo shows Marine One, a Sikorsky VH-3D Sea King, lands as US President Barack Obama arrives at Andrews Air Force Base in Maryland. PHOTO: AFP

The company said the purchase would have no impact on dividends plans to pare share count to below 300 million by end-2017.

Lockheed, which employs about 112,000 people worldwide, had net sales of $45.6 billion in 2014.

Sikorsky's 2014 sales jumped 19 per cent year-over-year, to $7.5 billion, but its operating profit was down by more than half.

"Exiting the helicopter business will allow UTC to better focus on providing high-technology systems and services to the aerospace and building industries and to deliver improved and sustained value to our customers and shareowners," said United technologies president and CEO Gregory Hayes in a separate statement.

UTC said the net proceeds from the sale would be used to buy back additional shares.

Dow member UTC rose 1.4 per cent to $112.27 in pre-market trade, while Lockheed jumped 2.9 per cent to $206.95.

Facebook Conversations