WASHINGTON — Aerojet said it will sell one of its missile defense-related businesses to help clear the way for its acquisition of rocket engine maker Pratt & Whitney Rocketdyne from United Technologies Corp.

In a Jan. 8 press release, Sacramento, Calif.-based GenCorp, Aerojet’s parent company, said Aerojet plans to divest its liquid-fueled divert and attitude control systems (LDACS) business to mollify U.S. antitrust regulators, who have been reviewing the proposed $550 million transaction since July. LDACS are used to propel and steer the kinetic kill vehicles that top U.S. missile interceptors toward their targets.

According to the press release, the U.S. Federal Trade Commission (FTC) which is reviewing the merger, has narrowed the scope of its investigation to the LDACS business. “The Company is in the process of preparing its LDACS business for sale to facilitate an expeditious completion of the FTC’s investigation,” the press release said.

GenCorp said it expects the deal to close during the first half of 2013.

Aerojet and Canoga Park, Calif.-based Pratt & Whitney Rocketdyne are the primary U.S. manufacturers of large liquid-fueled propulsion systems for rockets and spacecraft. Demand for their flagship propulsion products has plummeted in recent years, due in part to the 2011 retirement of NASA’s space shuttle fleet.

In the press release, GenCorp said the FTC had modified its letter requesting additional information related to the merger. Requests for additional information from antitrust regulators are not unusual for mergers of this scale.

“The modification excludes large and medium liquid rocket engines for launch vehicles and spacecraft from the scope of the FTC’s investigation of the proposed acquisition,” the press release said. The FTC has similarly modified its request for additional information from United Technologies of Hartford, Conn., the press release said.

With the emergence of vertically integrated rocket maker Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., Aerojet and Pratt & Whitney Rocketdyne are no longer the sole U.S. providers of liquid-fueled engines for launch vehicles. SpaceX’s Merlin engines are used exclusively on its own launch vehicles, however.

Aerojet and Pratt & Whitney Rocketdyne are the only established U.S. manufacturers of LDACS. Both companies recently have performed LDACS technology development work applicable to next-generation interceptors under contracts with the U.S. Missile Defense Agency.

Aerojet also makes solid-fueled divert and attitude control systems, as does ATK Defense Group’s Missile Products Division of Baltimore.

Following the merger, Aerojet will be without a peer U.S. competitor in liquid rocket engines. The company also builds solid-fueled rocket motors, but ATK Space Systems of Magna, Utah, is the dominant player in that market.

Warren Ferster is the Editor-in-Chief of SpaceNews and is responsible for all the news and editorial coverage in the weekly newspaper, the spacenews.com Web site and variety of specialty publications such as show dailies. He manages a staff of seven reporters...