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Lockheed Acquires Sikorsky in Major Defense Deal

Lockheed Martin has purchased helicopter maker Sikorsky Aircraft for a reported price of $9 billion, company officials announced July 20.

The acquisition of Sikorsky, a world leader in rotary-wing aviation, gives Lockheed a deep penetration into the global helicopter market. The deal is slated to formally close by the early part of next year at the latest, once various regulatory hurdles and approvals are met.

Currently a subsidiary of United Technologies, Sikorsky is known for many key helicopters in the U.S. military fleet such as the Army UH-60 Black Hawk, Navy MH-60 Sea Hawk, Air Force HH-60 Pave Hawk and Marine Corps CH-53 Super Stallion helicopter.

“Sikorsky is a natural fit for Lockheed Martin and complements our broad portfolio of world-class aerospace and defense products and technologies,” Marillyn Hewson, Lockheed Martin chairman, president and CEO, said in a written statement. “I’m confident this acquisition will help us extend our core business into the growing areas of helicopter production and sustainment. Together, we’ll offer a strong portfolio of helicopter solutions to our global customers and accelerate the pace of innovation and new technology development.”

Lockheed is known for a wide array of major defense programs to include the Littoral Combat Ship and the most expensive acquisition program in Pentagon history, the F-35 Joint Strike Fighter aircraft. Lockheed does not have a huge presence in the market for helicopter production. The company produces weapons for helicopters such as the Hellfire missile but has not made a major entry into the helicopter market.

Sikorsky is regarded as a leader in innovation regarding rotary-wing technologies. The firm makes the high-speed S-97 Raider helicopter, a rotary wing aircraft featuring coaxial counter-rotating rotorblades and a pusher propeller. The S-97 Raider is engineered to cruise at speeds up to 240 knots.

Sikorsky is also partnered with Boeing on a next-generation helicopter concept known as the SB-1 Defiant, a future rotary-wing aircraft concept being developed for the Army’s Joint Mulit-Role technology demonstrator program. The helicopter is designed with the Army-led Future Vertical Lift acquisition program in mind. The program aims to field a new fleet of helicopters beginning in the 2030s.

Acquiring Sikorsky will give Lockheed greater access to next-generation rotary wing technology and provide an enormous presence in the global helicopter market -- a business sector which has been challenged to generate competitive international sales in recent years due in part to growth in fixed-wing aerial sensor technology and unmanned systems.

For example, adding revenue from sales of Sikorsky’s Black Hawk helicopter is expected to increase 2015 revenue by as much as $6.5 billion, according to a report in the Wall Street Journal. Sikorsky executives said they had planned to increase this revenue up to $10 billion by 2025, the Journal report said.

Also, a Lockheed statement said the transaction with Sikorsky will have no impact on the company’s previously stated commitments to return cash to shareholders through dividends and to reduce outstanding share count to below 300 million shares by the end of 2017.

-- Kris Osborn can be reached at Kris.Osborn@military.com

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