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Dec 17 (Reuters) – L3Harris Technologies Inc ( LHX.N ) is closing in on a $4.7 billion deal to acquire U.S. rocket maker Aerojet Rocketdyne Holdings Inc ( AJRD.N ) from Lockheed Martin Corp (LMT) 10 months after $4.4 billion in sales. N) fell, people familiar with the case said on Saturday.

In February, Lockheed Martin pulled out of a deal with Aerojet after antitrust regulators sued to block it, arguing that allowing the El Segundo, Calif.-based company to take its biggest customer would seriously hurt Lockheed Martin’s competitors. :

L3Harris is a defense contractor that is primarily a competitor, not a customer, of Aerojet. Aerojet’s solid-fuel rocket engines and other propulsion systems will help L3Harris expand its space defense systems and precision munitions business.

L3Harris outbid General Electric Co ( GE.N ) in the final round of the Aerojet sale process with an offer of $58 a share, one of the sources said. The agreement can be announced already on Monday, the sources added.

The sources asked to remain anonymous because the matter is confidential. Spokesmen for Aerojet, L3Harris and General Electric did not immediately respond to requests for comment.

The deal represents a 28% premium to Aerojet’s share price on Oct. 24, the last trading day before Reuters reported the company was exploring a sale.

Aerojet is the largest maker of propulsion systems in the U.S. defense industry, remaining as an independent company after Northrop Grumman Corp ( NOC.N ) acquired Orbital ATK Inc for $9.2 billion in 2018.

The company develops and manufactures liquid and solid propellant rocket engines and hypersonic engines for space, defense, civil and commercial applications. Its clients include the Pentagon, Boeing ( BA.N ), Lockheed Martin and Raytheon Technologies Corp ( RTX.N ).

L3Harris itself is the product of industry consolidation, created by the 2019 merger of L3 Technologies and Harris Corp, which were looking for scale as they sought to become larger suppliers to the Pentagon. Since then, the company has been growing through acquisitions, most recently closing a deal in October to buy the tactical data business of Viasat Inc ( VSAT.O ) for $1.96 billion.

Analysts at Jefferies wrote in a note earlier this month that Reuters had reported that L3 Harris was one of the competing bidders for Aerojet, which was offering additional programs in key growth areas that would account for 15% of L3Harris’ sales. the %. “The overlap is more complementary than vertical, limiting regulatory risk,” Jefferies analysts wrote.

Reporting by David Carnevali in New York and Mike Stone in Washington, DC; Editing by Chizu Nomiyama

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