Lockheed Martin has entered into an agreement to acquire Blackhawk manufacture Sikorsky Aircraft for $9.0 billion.
The acquisition which is subject to customary conditions, including securing regulatory approvals is expected to close by late fourth quarter 2015 or early first quarter 2016. The transaction will have no impact on the company’s previously stated commitments to return cash to shareholders through dividends and to reduce outstanding share count to below 300 million shares by the end of 2017.
Lockheed Martin and United Technologies Corporation have agreed to make a joint election under Section 338(h)(10) of the Internal Revenue Code, which treats the transaction as an asset purchase for tax purposes. The election generates a tax benefit with an estimated present value of $1.9 billion for Lockheed Martin and its shareholders.
Lockheed plans to align Sikorsky under its Mission Systems and Training (MST) business segment. MST and Stratford, Conn., based Sikorsky currently partner on a number of critical programs, including the VH–92 Presidential Helicopter, Combat Rescue Helicopter and the Naval MH–60 Helicopter.