Aerojet Rocketdyne Offers United Launch Alliance $2 Billion
Aerojet Rocketdyne Holdings Inc reportedly made a $2 billion offer to United Launch Alliance, the prime spacecraft launch service provider of Pentagon jointly owned by Boeing Co. and Lockheed Martin Corp.
Bloomberg reported that people familiar with the issue said negotiations between the companies are on going, but a deal hasn't been finalized yet. Such deals would be closely scrutinized by the Pentagon. But according to reports, if everything goes smoothly, an agreement between the companies could come as soon as next week.
According to Reuters, Aerojet Rocketdyne board member Warren Lichtenstein approached ULA President Tory Bruno and executives of Lockheed and Boeing about the deal early in August. The information came from people familiar with the matter, but there are no official statements from Aerojet Rocketdyne, Lockheed, and Boeing yet.
ULA was formed in 2005, providing Pentagon extremely reliable rockets. It helped the government launch 90 satellites to the orbit without failed attempts. But according to a report from The Wall Street Journal, the prices it offers are higher than projected. Now, ULA is under pressure as it tries to compete with cheaper suppliers like Elon Musk's Space Exploration Technologies. The venture needs to cut cost and look for resources to build new rockets. Boeing and Lockheed Martin are also more firm with its investments in the company, which makes it harder for ULA to pull off its strategies. Aerojet Rocketdyne is ULA's major supplier of engines for rockets, hardware for boosters, propulsion systems, and other technologies needed for missile defense.
If the deal currently being negotiated pushes through, ULA will have the funds needed to fulfill its ambitious plans to develop and deploy new all-domestic rockets. According to one of the sources, ULA's owners might say yes to the bid to compete with other rocket providers like SpaceX, which is likely to affect ULA's revenue in the next several years.