Pentagon Voices Worries Over Defense Industry Mergers
Defense One looks at Undersecretary of Defense for Acquisition Frank Kendall’s concerns that mergers between major defense companies will reduce market competition.
“The Pentagon’s top arms buyer worries that Lockheed Martin’s upcoming $9 billion acquisition of Blackhawk helicopter maker Sikorsky is part of a bad trend in which large defense firms get bigger and competition wanes… Pentagon leaders have been expecting an uptick in industry mergers for several years. In 2011, Ash Carter — then the acquisition chief, now defense secretary — warned that the Pentagon would not support mergers among the biggest companies.”
“Kendall called the Lockheed-Sikorsky deal the most significant change to the defense industry since the general consolidation that followed the Cold War… Despite their concerns, the Defense Department leaders did not ask the Justice Department, which reviews such deals for antitrust concerns, to block the acquisition. The world’s largest defense company by revenue, Lockheed is the lead contractor on the $400-billion-plus F-35 Joint Strike Fighter program. But it does not build helicopters, which are Sikorsky’s specialty, and so the Justice Department approved the deal last week.”