Is Lockheed Martin too big to fail? Lockheed stands atop a group of the Defense Department’s big five suppliers. Last year, its $25.3 billion in Pentagon contracts accounted for nearly 9 cents of every U.S. defense-contracting dollar spent, which includes spending on food and fuel.
The world’s biggest defense contractor just got a lot bigger. This week Lockheed Martin Corporation announced that it will buy United Technologies’ [fortune-stock symbol=”UTX”] Sikorsky unit—the maker of the U.S. Army’s Black Hawk helicopters—for roughly $9 billion, or $7.1 billion after tax benefits.
The deal solidifies Lockheed’s [fortune-stock symbol=”LMT”] place as the United States’ dominant maker of military hardware, one that already pulls in roughly $45 billion per year (the Sikorsky deal could add $6.5 billion in 2015 revenue to Lockheed’s own forecasts). The news comes amid something of a shift in the company’s center of gravity. Along with announcing a stronger-than-expected quarter and the finalization of the Sikorsky deal, Lockheed also recently revealed that it may spin off or sell its information technology and technical services businesses following a strategic review. Those units account for roughly $6 billion in estimated 2015 sales and employ more than 17,000 people.
View original post 700 more words