U.S regulators have approved the takeover of Sikorsky Aircraft by Lockheed Martin Corporation (NYSE:LMT) worth $9 billion. The acquisition would expand Lockheed presence in defense market, a key metric for the growth of the firm. Lockheed is already outpacing its nearest competitors, the defense businesses of Boeing Co (NYSE:BA) and Northrop Grumman Corp.
Japan and South Korea had showed green signal to the deal, yet other regulatory approvals were under process the firm said, based U.S. Securities and Exchange Commission reports.
According to Reuter reports, Lockheed acquisition of Sikorsky Aircraft was expected to complete in the current year.
At the time of announcement of deal in July, Lockheed said that it didn’t consider a deal to hurt the aerospace products market and projected to complete the procurement by late in the fourth quarter of 2015 or early 2016.
Yet the firm will have to convince European Union, China and a host of other countries to support the deal where one or both companies have business interests.
“Things are tracking well,” said one source.
If the deal goes through, then Sikorsky will absorb into the company’s Mission Systems & Training (MST) operation, creating a division with about $15 billion in annual revenues, according to Lockheed. Martin holds the global air defense market. The firm’s Mission Systems and Training business, headquartered in Washington, DC, provides services to some of high-profile programs including the Aegis Combat System, Littoral Combat Ship, MH-60 helicopter avionics, as well as military and commercial orders.
The deal will be marked as the firm’s largest since it bought Loral Corp’s defense electronics business for $9.1 billion in 1996, and fused with Martin Marietta in 1994 in a deal that valued at $10 billion.
Sikorsky is well known for its helicopters, particularly its Black Hawk helicopters, and it is also one of the largest helicopter makers globally.
The addition of Sikorsky would increase the market value of Lockheed to $63 billion. The firm reported revenue of $45.6 billion in 2014.
