Lockheed Martin agreed to acquire military aircraft maker
Sikorsky from United Technologies Corp. for $9.0 billion and said
it may separate its government information-technology and technical
services businesses.
Lockheed said it would explore whether those businesses can
achieve greater growth and create more value for customers and
shareholders outside of the corporation.
Specifically, the company will review its information systems
and global solutions business segment as well as a portion of the
missiles and fire control business segment. Lockheed said those
programs represent roughly $6 billion in estimated 2015 sales and
include more than 17,000 employees.
Lockheed added that information systems and global solutions
programs that aren't included in the strategic review are mostly
focused on defense and intelligence customers and will be realigned
into its four other business segments after the review.
As for the Sikorsky deal, Lockheed said in a news release Monday
that the price goes down to about $7.1 billion, after taking into
account tax benefits resulting from the transaction.
The companies expect the acquisition to close by later this year
or early 2016 fourth quarter 2015. Sikorsky will become part of
Lockheed's mission systems and training business segment.
Lockheed added that the transaction will have no impact on the
company's previously stated dividend or stock-repurchase plans.
United Technologies, meanwhile, said it plans to use proceeds
from the deal to buy back stock to offset the impact of the deal on
its per-share results.
The company's board authorized the repurchase of as much as 75
million shares of its stock, replacing an earlier share-repurchase
plan that was nearing completion.
United Tech Chief Executive Gregory Hayes stated Monday that
"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."
Sikorsky, best known for its Black Hawk choppers, is one of the
world's largest helicopter makers. It manufactures military and
commercial helicopters and is the Pentagon's largest rotorcraft
supplier by value.
In March, United Technologies said it would explore strategic
alternatives for the business.
The planned purchase of the world's largest military helicopter
maker could provide a growth engine for Lockheed, whose revenues
have remained essentially flat over the past five years as Pentagon
budget cuts have only been partially offset by expanding export
sales.
Write to Tess Stynes at tess.stynes@wsj.com
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