The Federal Trade Commission confirmed regulators will not block L3Harris’s Aerojet Rocketdyne acquisition. The news was confirmed by Aerojet Rocketdyne Chief Executive Officer Chris Kubasik ahead of the company’s second quarter earnings call, according to a recent Breaking Defense report.
“We were advised today that the FTC will not block our acquisition of Aerojet Rocketdyne; therefore, we are moving forward to close the transaction on or about July 28,” Kubasik wrote in the letter, according to Breaking Defense.
The confirmation to resume the deal comes after federal regulators reviewed the second request for information to both L3Harris and Aerojet, stating concerns about one of the companies being one of only two major suppliers of solid rocket motors to the Pentagon, Breaking Defense reported.
“We’ve obviously always been concerned about Aerojet. But I would say some of these things have been magnified by all these external inputs,” Wes Kremer, president of Raytheon, told Breaking Defense during last month’s Paris Air Show.
If finalized, the deal would position L3Harris in a stable position to become the company with the sixth major defense prime, Breaking Defense reported.
“Aerojet has had issues with both their suppliers and their labor, being able to, you know, have trained employees,” Kremer responded when asked by Breaking Defense about the potential challenges RTX may see from its supplier. “Building rocket motors is a pretty specialized kind of business that requires not only the safety aspects of that, but there’s a lot of training, and it’s pretty precise types of things that have to be done. And so, the combination of those things has certainly created problems. And then I think, let’s face it, there’s been a lot of distractions from activist investors to proxy fights, all of those things. Aerojet is not only an important supplier to us, they’re an important national asset. And so, what we want to see is stabilization of that, and [get] dependable deliveries.”