[1/3]A Lockheed Martin F-35 fighter jet performs a flying display at the 54th International Paris Airshow at Le Bourget Airport near Paris, France, June 20, 2023. REUTERS/Benoit Tessier
PARIS, June 20 (Reuters) – Lockheed Martin (LMT.N) has raised concerns with the U.S. Defense Department and Federal Trade Commission (FTC) about L3Harris’s (LHX.N) acquisition of Aerojet Rocketdyne (AJRD.N), Lockheed’s chief operating officer said on Tuesday.
Frank St John told Reuters that Lockheed, Aerojet’s biggest customer, wanted L3Harris to ensure access to rocket motors, fair pricing and IP protections, adding that it had received “little response” from L3Harris over its concerns.
“To date, we’ve been unable to gain a commitment from L3Harris for those provisions as a merchant supplier,” St John said in an interview at the Paris Airshow.
“This is really concerning to us because they are going to be vital to meeting the increasing demand that we’re seeing on multiple weapons systems,” such as the Javelin missile launcher and Patriot air defense system.
If L3Harris continues to be unresponsive, Lockheed wants the Defense Department or FTC to put in place a mechanism to guarantee access to technology, St John said.
A spokesperson for L3Harris did not comment on the concerns raised by Lockheed directly but said: “We are in an FTC process and expect the transaction to close the second half of 2023.”
The FTC declined to comment, Aerojet Rocketdyne referred requests for comment to L3Harris and Defense Department did not immediately respond to emailed requests for comment.
L3Harris said in December it would buy Aerojet for $4.7 billion in cash as it looks to tap into rising demand for missiles because of the Ukraine conflict.
Lockheed previously attempted to buy Aerojet in a $4.4 billion deal, but walked away from the acquisition in February 2022 after the FTC sued to block the deal, citing concerns that Lockheed could hinder competitors’ fair access to Aerojet products.
RTX (RTX.N) executives, who opposed Lockheed’s failed bid for Aerojet, have signalled they would not do the same in L3Harris’ case, with RTX CEO Greg Hayes saying that L3Harris is not a competitor in the missile business in an interview with trade publication Defense One.
RTX Chief Operating Officer Chris Calio told Reuters in an interview on Monday that “any transaction that can bring investment, capability and capacity would be helpful. I don’t think status quo is an option.”
Reporting by Valerie Insinna
Editing by Mark Potter and Barbara Lewis
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