The purchase of the Black Hawk helicopter maker will help Lockheed lessen its dependence on its F-35 fighter jet business and boost overseas sales. Fred Katayama reports.
Add Black Hawk and Seahawk choppers to Lockheed Martin's huge lineup. The defense contractor is buying United Technologies' Sikorsky Aircraft business for $9 billion. The commercial and military helicopters will help Lockheed lessen its dependence on its F-35 fighter jet business. It'll also help expand its overseas sales just when contractors face weak spending by the U.S. government. By selling Sikorsky, United Technologies gets out of the helicopter business that seemed an odd fit with its Otis elevators and Pratt & Whitney jet engines. The company says it'll use the sales proceeds to buy back more shares. The companies expect to close the deal by early next year subject to regulatory approval. Lexington Institute defense analyst and COO Loren Thompson doesn't expect objections, saying, "It's a big deal, but it doesn't concentrate markets any further than they already were. There's no real overlap between the fighter market and the rotorcraft market." Lockheed Martin's stock rising in early trading. United Technologies giving back ground. Lockheed also said it could sell or spin off its government information technology and technical services businesses. It's exploring whether the businesses that generate $6 billion in sales can achieve greater growth and create more value for shareholders outside of the company. All this announced as the company reported a rise in quarterly profit and hiked its outlook for this year.