Lockheed Martin purchase Sikorsky for $9 billion

Lockheed Martin has purchased Sikorsky Helicopters for $9 billion.

The actual price Lockheed will pay is reduced to around $7.1 billion due to account tax benefits as a result of the acquisition.

The purchase still subject to regulatory approvals, but is expected to be completed by the end of the fourth quarter of 2015, or early in the first quarter of 2016.

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“Sikorsky is a natural fit for Lockheed Martin and complements our broad portfolio of world-class aerospace and defense products and technologies,” said Marillyn Hewson, Lockheed Martin chairman, president and CEO. “I’m confident this acquisition will help us extend our core business into the growing areas of helicopter production and sustainment. Together, we’ll offer a strong portfolio of helicopter solutions to our global customers and accelerate the pace of innovation and new technology development.”

Sikorsy’s parent company United Technologies Corporation had said earlier the year that following a strategic portfolio review they were looking at different options for its helicopter unit.

Following the review, UTC found that Sikorsky’s five to six percent annual growth lagged behind the average 10 percent annual growth of other companies under its umbrella.

For Lockheed Martin, the acquisition gives the company a foothold in the helicopter market, something that is missing from its diverse defence portfolio.

Sikorsky’s revenue in 2014 was $7 billion, with a backlog valued at $16 billion.