Defense News quotes M.A. and George Lund Fellow for Emerging Defense Challenges Steven Grundman on why Lockheed Martin’s planned acquisition of Sikorsky Aircraft may be a harbinger of increased mergers and acquisitions activity in the defense industry:
Steve Grundman, a former Pentagon industrial policy chief who is now a consultant and member of the Atlantic Council, said he doesn’t see any obvious deal-breakers, but he expects that antitrust regulators in the Department of Justice will subject the purchase to close scrutiny. Should the deal go through, it would not mean that regulators — or top industrial policy officials inside the Pentagon — have established a precedent and given the go-ahead to similarly sized deals in the future, he said.
“The potentially precedential character of this merger for corporate strategy is it may signal other companies that the marketplace for large systems integration is gone; if you want to be a major prime contractor in the US defense market going forward, you’re going to have to bring a platform,” he said.