This seems like a really weird story:
Rocket engine maker Aerojet Rocketdyne has offered to buy launch services provider United Launch Alliance from Lockheed Martin and Boeing for at least $2 billion, an industry source told SpaceNews Sept. 8.
The unsolicited bid is the latest twist in what has been a topsy-turvy year for ULA, the primary U.S. government launch services provider.
First, this begs the question of whether the parents would be willing to sell. I’m not sure they’d want to give up control, given the strategic issues involved. An unfettered ULA could be almost as disruptive to their government business (particularly SLS) as SpaceX has been.
Of course, a purchase by AJR would probably pretty effectively fetter them in other ways. The only reason for the company to do this is pure desperation. If Tory gets his way, and they build Vulcan/ACES, and end Atlas, Delta and Centaur, and phase out use of the RL-10 as well (which they’ve been wanting to do for years), AJR is pretty much out of business. But it would be acquiring and preserving launch systems that are already known to be uncompetitive on the future market, and it still needs money to build the AR-1, the RD-180 replacement. Congress seems willing to throw them money for that. But the problem is, even if the taxpayer pays for development, the vehicle itself will remain uncompetitive against SpaceX, since even with the development subsidy, manufacturing costs will be higher than the current price for the RD-180 from Russia.
Which makes this story at Engadget pretty funny:
United Launch Alliance is a joint-venture between Lockheed Martin and Boeing that launches spy and navigation satellites for the Pentagon and Air Force. Now, the firm is the subject of a $2 billion bid from engine business Aerojet Rocketdyne, a company that’s been snubbed in its attempts to power the Atlas V. If the government’s shadowy army of intelligence analysts and accountants approve the deal, it could create a new aerospace behemoth that could leave Elon Musk shivering out in the cold.
Say what? If I were Elon, I’d be cheering this on, for reasons stated above. What I’d be worried about would be a counteroffer from Bezos, because this deal leaves Blue Origin out in the cold, in terms of suddenly having to develop their own rocket for the BE-4. I’ll bet he’s thinking about it. Of course, as I said above, this all presumes that Boeing and Lockmart are willing to sell. It was reportedly an unsolicited bid.
[Update a few minutes later]
Yes, as noted in comments, it’s a third higher than their market cap. And it’s just an opening bid, no way they’d get it for that price. It might be possible to do some kind of mezzanine M&A deal, but it sure looks like a bad bet to me.
[Mid-afternoon update]