Lockheed to buy United Tech’s Sikorsky
Lockheed Martin, the defense contractor that plans to acquire Sikorsky Aircraft, finds itself in the unusual position of buying the same company it has been striving to beat out in a design “fly off” – a high-stakes contest that could set up the winner for an extended run not unlike that enjoyed by Sikorsky after the Pentagon picked the Black Hawk in 1972 as its all-purpose helicopter.
On July 20, Bethesda, Md.-based Lockheed Martin (NYSE: LMT) announced the $9 billion purchase of Stratford-based Sikorsky from United Technologies (NYSE: UTX). That ended months of speculation about whether Hartford-based UTC would spin off Sikorsky as an independent company or sell it, with Bell Helicopter parent company Textron (NYSE: TXT) also having been rumored as a bidder.
If the deal, which would require regulatory and other federal approvals, goes through Lockheed Martin will be turning its attention to three major U.S. government contracts on the horizon for Sikorsky; new competing helicopters from Bell and Airbus; and farthest out, the Future Vertical Lift competition to produce aircraft that can take off like a helicopter and cruise at far faster speeds than today’s Black Hawks.
Sikorsky has partnered with Boeing (NYSE: BA) for Future Vertical Lift, while Bell’s lead partner providing the cockpit, avionics and other systems is none other than Lockheed Martin—putting that company in the unusual position of occupying the pilot or co-pilot seat for both programs.
To call it a potential win-win scenario would be an understatement—the Department of Defense sees any winning Future Vertical Lift aircraft as the possible replacement for not just the Black Hawk and its Seahawk naval cousin, but also for the U.S. Army’s AH-64 Apache attack helicopter and CH-47 Chinook cargo helicopter, both made by Boeing; and Bell’s OH-58 Kiowa scout.
