In a big move for Lockheed Martin, the largest U.S. weapons maker will acquire Sikorsky Aircraft, a division of United Technologies. The sale price: $9 billion. The deal is expected to close later this year or early 2016. Sikorsky, maker of the Black Hawk and Marine One helicopters, has been manufacturing helicopters for the U.S. government since 1958. The acquisition is the largest for Lockheed since it bought Martin Marietta for approximately $10 billion over twenty years ago. Lockheed’s purchase of Sikorsky further strengthens the weapon maker’s stronghold on the United States defense business, with its nearest competitors, Boeing and Northrop Grumman, only small players.
Department of Defense budget reports show that the United States military has requested $1.6 billion to buy 94 UH-60 Black Hawks in 2016. Further, in 2014, Sikorsky won a $1.24 billion contract from the United States Navy to manufacture six new helicopters by 2020 and a total of 21 helicopters by 2023. These new helicopters will replace the current Marine One Fleet.
Sikorsky accounted for only 10% of United Technologies’ profits for the first quarter of 2015. Company officials state that selling the Sikorsky division will allow the company to focus more of its attention and power on other high-tech factions of the defense industry. United Technologies also owns the Otis brand of elevators, the Carrier line of air conditioners and the Pratt & Whitney brand of jet engines.
The Black Hawk helicopter was made famous for its missions in Somalia in 1993. Eighteen American soldiers were killed during the Battle of Mogadishu where two helicopters were shot down. The events became the basis of the book and movie “Black Hawk Down.”
Both shares for Lockheed Martin and United Technologies rose more than 1% this morning in early trading.
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