Reuters
Summary List Placement- Shares of Aerojet Rocketdyne gained as much as 26% to $53.10 on Monday after defense giant Lockheed Martin announced its acquiring the company in a $4.4 billion deal.
- Aerojet manufactures defense rocket engines and will give Lockheed a larger stake in the increasingly competitive space and hypersonic technology space.
- Aerojet Rocketdyne's propulsion systems are already a key component of Lockheed Martin's supply chain, though the acquisition will expand this partnership.
- Lockheed Martin dropped as much as 2.7% on Monday.
- Watch Aerojet Rocketdyne trade live here.
Shares of Aerojet Rocketdyne Holdings gained as much as 26% on Monday after defense giant Lockheed Martin announced it's acquiring the company in a $4.4 billion deal.
Lockheed will purchase Aerojet for $56 per share in cash, which is expected to be reduced to $51 per share after the payment of a pre-closing special dividend, according to a company statement.
Aerojet is an aerospace and defense rocket engine manufacturer. The acquisition will give Lockheed a larger stake in space and hypersonic technology as it competes alongside newer entrants like SpaceX for space contracts with the US government.
Aerojet Rocketdyne's propulsion systems have already been a "key part" of Lockheed's supply chain across its aeronautics, missiles and fire control businesses, according to a company statement. The acquisition will add expertise in propulsion to Lockheed Martin and expand the partnership that has already been established.
"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," said James Taiclet, the CEO of Lockheed.
He added: "We look forward to welcoming their talented team and expanding Lockheed Martin's position as the leading provider of 21st century warfare solutions."
Despite Monday's gains, Aerojet is still down 8% year-to-date. Lockheed Martin dropped 2.7% at intraday lows on Monday.
The transaction is expected to close in the second half of 2021.
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