FTC aims to block Lockheed acquisition of Rocketjet

The Federal Trade Commission said Tuesday it would try to block Lockheed Martin Corp.’s proposed $4.4 billion acquisition of Rocketjet Aerodyne Holdings Inc. The move is the latest in the agency’s far more aggressive antitrust stance under new director Lina M. Khan.

In a news release, the commission called Rocketjet “the last independent U.S. supplier of missile propulsion systems.” The company has headquarters in El Segundo and Sacramento.

“If consummated, this deal would give Lockheed the ability to cut off other defense contractors from the critical components they need to build competing missiles,” FTC Bureau of Competition Director Holly Vedova said in the news release. “Without competitive pressure, Lockheed can jack up the price the U.S. government has to pay, while delivering lower quality and less innovation.”

Rocketjet posted a statement on its website that read, “Aerojet Rocketdyne continues to believe in the benefits of the transaction for the United States and its allies, the industry, and all of the company’s stakeholders.”

A Lockheed spokesman, Trent Perrotto, said in an email, “In general, it is our practice not to comment on pending litigation. As we said on our earnings call, we are reviewing the FTC’s complaint and will respond in due course.”

Lockheed reported stronger than expected earnings on revenues of $17.7 million for the fourth quarter of 2021 on Tuesday. The news drove the company’s stock higher despite the FTC’s action.

The FTC’s news release said the move followed a Department of Defense review that found the merger could endanger national security. The agency said it would file an administrative complaint and “file a complaint in the U.S. District Court for the District of Columbia seeking a preliminary injunction to stop the deal pending an administrative trial … scheduled to begin on June 16, 2022.”

Khan, 32, rose to prominence for a 2017 article in the Yale Law Journal in which she argued the longtime practice of focusing antitrust enforcement on consumer prices was no longer adequate. The Senate confirmed her appointment by President Joe Biden as commission chair in June.

Last month, the FTC sued to block Nvidia Corp.’s proposed $40 billion acquisition of U.K. chip designer Arm Ltd. In September it rescinded guidance passed under former President Donald Trump that made it easier to complete so-called vertical mergers between companies operating in different areas of a supply chain.