Lockheed Martin, the United States' largest weapons maker, has agreed to buy Black Hawk helicopter maker Sikorsky for $9 billion, the Associated Press reported.
Lockheed Martin Corp. said Monday that it plans to add Sikorsky to its mission systems and training unit.
Hartford-based United Technologies Corp. announced in June that it planned to shed Sikorsky, either through a sale or spinoff. The aerospace and building systems conglomerate wants to focus on high-technology systems and services for the aerospace and building industries.
Aside from Black Hawk helicopters, Sikorsky makes presidential helicopters. Sikorsky helicopters have also returned astronauts home after they splashed down in the Pacific Ocean at the end of their space travels.
The deal is targeted to close by the end of the year or in 2016's first quarter and is "subject to regulatory approvals and customary closing conditions and adjustments," United Technologies announced on its website.
"We are very pleased to announce this transaction," UTC President and Chief Executive Officer Gregory Hayes said in a statement. "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.
He said that with Lockheed Martin, "one of the world's leading aerospace and defense companies" purchasing Sikorsky, it will remain "a technology leader at the forefront of vertical lift."
"We are committed to working closely with Lockheed Martin to execute a seamless transition for customers and employees," Hayes said.
UTC's Board of Directors approved a "share reportchase program for up to 75 million shares of the company's common stock, which would be worth approximately $8.3 billion," according to a news release from the company.
UTC is using J.P. Morgan as a financial advisor in the sale and its legal advisor is Wachtell, Lipton, Rosen & Katz.
U.S. Sen. Chris Murphy (D-Connecticut) released a statement late Sunday night on the Sikorsky reports.
"For nearly 90 years, Sikorsky has provided generations and generations of hard working Connecticut residents with the stable and meaningful career opportunities they deserve, and the liberties that come with it," Murphy said. "As the sale of Sikorsky becomes final, I will work closely with Sikorsky leadership to protect those jobs and ensure that Sikorsky helicopters continue to be made right here in Connecticut by our skilled and talented workforce. Connecticut's defense manufacturing industry is the best in the world, and I am committed to supporting and defending the tens of thousands of jobs it supports across our state."
U.S. Sen. Richard Blumenthal, a member of the Senate's Armed Services Committee, also released a statement Sunday night.
“Regardless of ownership , Sikorsky's skilled, dedicated workers produce the world's best helicopters – and I will fight to assure that they continue to make them," Blumenthal said. "This workforce is a vital national security asset, and I will spare no effort or energy to support it. I will review carefully and closely any change in ownership and urge the Senate Armed Services Committee, on which I serve, along with the Department of Defense to scrutinize these issues as well, because the helicopters produced at Sikorsky are critical to our national security. I hope and expect a smooth transition to the next owner. The mobility, medical care, rescue operations, and other key functions of our armed forces are at stake.”
David Cadden, professor emeritus at Quinnipiac University's School of Business, said he was surprised that Lockheed Martin would buy Sikorsky.
“Lockheed Martin's acquisition of Sikorsky was somewhat of a surprise,” Cadden said in a written statement. “Of the major players in the aerospace defense industry, Boeing, Northrop-Grumman, Textron and Lockheed Martin, Lockheed Martin and Northrop-Grumman are the only companies without a presence in the helicopter field. Although Textron submitted a bid for Sikorsky, it apparently was insufficient compared to Lockheed Martin's bid. It would appear that Lockheed Martin is actively committed to being in the defense industry. It has a proportion of sales coming from defense-related units that is far higher than Boeing or Northrop-Grumman. Decades ago, Lockheed Martin lost a major helicopter contract with its highly advanced Cheyenne helicopter. This will be Lockheed Martin's largest acquisition in two decades. One hopes that the new parent firm will not immediately seek major job relocations.”
The company plans on discussing the sale at a call previously scheduled with investors and analysts on Tuesday once UTC releases its quarterly financial results. The presentation will be available beforehand on UTC's website, http://www.utc.com.