US FTC sues Lockheed Martin to block acquisition of key missile component manufacturer
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US FTC sues Lockheed Martin to block acquisition of key missile component manufacturer

The Federal Trade Commission (FTC) has filed an administrative complaint against defense contractor Lockheed Martin Tuesday in an attempt to block the contractor’s acquisition of Aerojet Rocketdyne Holdings.

Aerojet is a manufacturer of advanced power, propulsion, and armament systems, all of which are components for missiles made by Lockheed and other defense contractors. Aerojet is also the last independent US supplier for several of the critical inputs for missile propulsion systems. Lockheed Martin has proposed buying Aerojet for $4.4 billion. The acquisition would give the company control over those critical inputs that other contractors need in order to compete against Lockheed.

The Department of Defense (DoD) reviewed the proposed acquisition for its potential impacts on national security, and provided that review to the FTC, which determined that the acquisition would harm several weapon systems that DoD relies on. The FTC also determined that there is no sufficient remedy to the harms the acquisition would cause. The deal would allow Lockheed to cut other contractors off from crucial components they need to build competing systems.

“Without competitive pressure, Lockheed can jack up the price the U.S. government has to pay, while delivering lower quality and less innovation,” said FTC Bureau of Competition Director Holly Vedova. “We cannot afford to allow further concentration in markets critical to our national security and defense.”

The vote by the FTC to issue the complaint was 4-0. The commission plans to file a complaint in the U.S. District Court for the District of Columbia seeking a preliminary injunction against the acquisition prior to the start of the administrative trial, which is expected to begin on June 16.missile