Pentagon Closely Monitoring Sikorsky Deal
Officials at the US Defense Department stated on July 14, that it is closely monitoring the sale process of Sikorsky Aircraft, and that any potential deal would be evaluated on a case by case basis.
Although during the last week, Lockheed Martin has been slated as the favorite suitor to take over the helicopter maker from its parent company United Technologies Corp, in a deal valued at $8 billion, Texton is also still in the mix, and there is still the  possibility that it will be spun off into a stand-alone company.
While not commenting on anything specifically, the Pentagon has stated that it is very important to maintain competition and preserve the integrity of the market. In general, the US Defense Department says they only intervenes in the marketplace when necessary to preserve a competitive edge, which includes closely following mergers that would reduce competition, or create alterations in the market which are not in the country’s best interest.
The Pentagon concern seems to be over the possibility of a buyout by Texton. Bell Helicopters is a division of Textron already responsible for a hefty amount of defense contracts. The antitrust potential of a single company having too big of a share of the helicopter market is the main issue, as it could potentially remove incentives to bring new innovation into the development of both military and civilian helicopters.
The combination of Bell and Sikorsky would make it the largest helicopter company in the world, and this merger would reduce the number of major helicopter makers in the United States from three to two.
This makes the Pentagon interest understandable, and could be the reason UTC eventually goes with Lockheed. Pentagon spokeswoman Maureen Schumann declined comment, but said it was important to the department to maintain competition and avoid market distortions.
A decision is expected from UTC by the end of the month.
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