According to the announcement, Lockheed will pay $56 per share for Aerojet Rocketdyne, a 33% premium to Friday’s closing price.
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” Lockheed Martin President and CEO James Taiclet said in a statement. “This transaction enhances Lockheed Martin’s support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology.”
Pending the transaction’s approval by shareholders and regulators, Aerojet Rocketdyne’s shareholders will receive a special pre-closing dividend of $5 per share in common stock and convertible senior notes in March 2021, which, unless revoked, is expected to reduce the transaction’s purchase price to $51 per share.
The transaction is expected to close in the second half of 2021.
Aerojet Rocketdyne, which has nearly 5,000 employees and 15 primary operations sites across the United States, earned revenue of approximately $2 billion in 2019. The Bethesda, Md.-based company already uses Aerojet Rocketdyne’s propulsion systems as part of its aeronautics, missiles, fire control and space business offerings.
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Additional details regarding the transaction will be discussed with investors and analysts during a live webcast at 8:30 a.m. Monday.