L3Harris to buy Aerojet Rocketdyne

WASHINGTON: L3Harris Technologies Inc has agreed to buy rocket engine maker Aerojet Rocketdyne Holdings Inc in a deal valued at about US$4.7 billion (163.6 billion baht).

L3Harris will pay $58 per share in the all-cash transaction, which includes debt, the company said in a statement Sunday. The transaction price represents a 37% premium to what Aerojet cited in an investor document as its unaffected share price — its $42.49 closing price on Aug 15. Activist Investor Elliott Investment Management disclosed that day that it had taken a stake in the company.

“With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset,” Christopher E. Kubasik, chief executive officer of L3Harris, said in the statement.

Shares of Aerojet have climbed 17% this year, closing at $54.89 Friday to give the company a market value of $4.4 billion. The deal is its second effort to sell itself in as many years.

Aerojet agreed in December 2020 to be bought by Lockheed Martin Corp. in a transaction valued at $4.4 billion. However, that deal was terminated this past February after the Federal Trade Commission moved to block it on antitrust grounds.

Based in El Segundo, California, Aerojet makes a range of rockets, including hypersonic engines and electric power systems, for customers including Nasa, Boeing Co, Raytheon Technologies Corp. and Lockheed Martin, according to its website.

A deal would follow L3Harris’s agreement in October to buy Viasat Inc.’s tactical data links division for about $1.96 billion. That acquisition is seen as helping Melbourne, Florida-based L3Harris, with a market value of about $41 billion, compete with larger Pentagon suppliers such as Raytheon and Lockheed Martin.