Lockheed Martin Now Front-runner in $8 Billion Sikorsky Sale
UTC’s Sikorsky helicopter unit could be sold to Lockheed Martin Corp for up to $8 billion, according to a source familiar with the situation. This comes only two days after it was reported that that Lockheed and Textron had arisen as final competitors to buy Sikorsky, with a decision expected by the end of the month.
United Technologies, the Parent company of Sikorsky, confirmed in June their intention to exit the helicopter field, and either sell or spin-off Sikorsky. While a sale rather than spin-off seems to be the most likely option at this time, both are still under consideration.
Sikorsky, which has been building presidential helicopter’s since the 1950s, including the iconic “Marine One“as well as Blackhawk military helicopters, soon after the announcement that said would have to lay off 720 employees from its Coatesville facility.
Most of those jobs have been created recently, as Sikorsky grew from 700 employees in 2010 to 1,800 in late 2014. The boost was primarily due to the fact that Sikorsky won a $1.24 billion bid to build six presidential helicopters at the Chester County facility and has expanded into the Coatesville 28-acre facility.
The emergence of Lockheed as the main contender for the purchase of Sikorsky does not come as a surprise, considering the already existing relationship between the two companies. However, there were doubts if Lockheed would make the jump to actually manufacturing helicopters.
According to sources, an agreement between Lockheed and United Technologies could be reached as soon as the end of this week, securing UTC an injection of $8 billion. However, with recent market volatility and some share owners reducing their holdings, some analysts including Deutsche Bank have reduced their target price of from $130 a share to $128 making investing in UTC a risk until the sale is finalized.
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