U.S. aerospace, and arms manufacturer, Lockheed Martin Corp. has reportedly scrapped its plans to acquire rocket and missile propulsion maker, Aerojet Rocketdyne Holdings Inc. for USD 4.4 billion. The decision comes after the proposal was met by heavy resistance from U.S. competition enforcers.

The Federal Trade Commission appealed against the deal in January on grounds that it would put Lockheed in a highly advantageous position, which could be used to hurt other defense contractors. Raytheon Technologies was one of the most outspoken opponents of the acquisition.

The buyout, which was disclosed in late 2020, drew industry-wide censure as it would essentially give Lockheed a monopoly over solid fuel rocket motors, which is a major component of the U.S. missile market.

Chief Executive Officer at Lockheed, James Taiclet stated that the acquisition would have bolstered efficiency & speed while also cutting costs for the U.S. government. However, he said that scrapping the deal was in the best interests of its stakeholders.

Aerojet, which will be announcing its fourth quarter earnings by the end of this week, has said that it still expects a robust future performance in spite of the canceled acquisition.

Notably, the companies' merger agreement excludes the requirement for a termination fee in case of antitrust regulators opposing the deal. A Lockheed representative had previously claimed that the company will not be making any such compensatory payments to Aerojet.

Strong critics of the deal included Democrat Senator Elizabeth Warren, who had urged the FTC to check internal firewalls that Lockheed had promised to put in place in order to limit the competitive edge it would gain over its peers.

Lockheed had argued in favor of the deal, contending that it accounted for over 33% of Aerojet's sales and that the acquisition would play a critical role in reducing costs for the Pentagon as well as U.S. taxpayers.

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https://money.usnews.com/investing/news/articles/2022-02-13/lockheed-martin-terminates-4-4-billion-deal-to-acquire-aerojet-rocketdyne