Lockheed, Boeing Still Expecting Launch Deal To Close By Year’s End

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  Space News Business

Lockheed, Boeing Still Expecting Launch Deal To Close By Year’s End

By BRIAN BERGER
Space News Staff Writer
posted: 31 October 2005
11:47 am ET


Boeing and Lockheed Martin still expect to close on the creation of United Launch Alliance by year’s end despite a decision by U.S. government antitrust officials to delay approval of the proposed merger of the two firms’ government launch businesses.

The Federal Trade Commission (FTC) had been expected to rule Oct. 24 on the United Launch Alliance deal but instead asked Boeing and Lockheed Martin to provide more information about the proposed merger before making a decision.

The FTC does not comment on pending decisions on corporate mergers, but Boeing and Lockheed Martin announced Oct. 24 that the FTC had made a so-called second request for information, postponing for now a government decision on the creation of United Launch Alliance.

“Our government customers want to fully understand the operational and financial impact to the proposed joint venture,” Lockheed Martin spokesman Jeff Adams said Oct. 24. “They’ve asked numerous detailed questions. We believe we have satisfactory answers to all those questions but it takes time to go through all the analysis thoroughly.”

Still, Adams and Boeing spokesman Dan Beck expressed confidence that the merger will be approved and that the two companies will be able to close the transaction before the end of the year.

“Once we have provided the government with the additional information they are seeking that starts a 30-day clock for them to make their decision,” Beck said Oct. 25. “Our plan is to close this deal by the end of the year.”

While neither Boeing nor Lockheed Martin could immediately provide Space News with a list of the questions the FTC is asking, Beck described the FTC request as seeking “just more details about the work we’ve done, contracts, and various information about the business as it is now.”

Boeing and Lockheed Martin estimate that United Launch Alliance will save the government $150 million annually.

Boeing and Lockheed Martin originally submitted their merger plan to the FTC for review Aug. 22, but pulled that proposal in late September and resubmitted it a few days later, resetting the FTC’s 30-day deadline for reaching a decision.

The FTC’s decision to seek more information came less than a week after launch startup Space Exploration Technologies (SpaceX) filed a lawsuit in the U.S. District Court for the Central District of California seeking an injunction against the Boeing and Lockheed Martin launch merger.

FTC officials also have heard from Northrop Grumman officials seeking binding assurances from Lockheed Martin and Boeing that United Launch Alliance would not give preferential treatment to its two parent companies in satellite competitions.

While aerospace analysts had predicted that SpaceX’s suit would prompt the FTC to delay its decision on the merger, Boeing and Lockheed Martin said they did not believe the suit was a factor.

“We don’t feel it has any bearing at all,” Beck said. “We feel the lawsuit is totally without merit. As we go through this antitrust review process with the FTC we feel confident that it will be decided that ULA doesn’t pose any threat to competition in the launch business.”

Comments: bberger@space.com