Aerospace and defense giant Lockheed Martin Corp.
LMT,
said Tuesday that it is “highly likely” the U.S. Federal Trade Commission will sue to block the company’s acquisition of Aerojet Rocketdyne Holdings, Inc.
AJRD,
in the coming days.
“We have been advised by the FTC that its concerns regarding the transaction cannot be addressed adequately” through mutually agreed upon remedies that would blunt the anticompetitive effects of the combination, the company said in a filing with the Securities and Exchange Commission.
The news sent Aerojet shares tumbling more than 16% in Tuesday morning trade to around $37.70, well below the $51 per share Lockheed had agreed to pay to acquire the company in December of 2020.
The FTC will often require companies to divest certain assets or agree to abide by certain behavioral strictures before approving a merger, but the FTC advised Lockheed that its antitrust concerns likely cannot be assuaged by such requirements.
Lockheed said that if the FTC does sue to block the merger, it will have 30 days to decide whether to defend the lawsuit or terminate the merger agreement.
