An Aerojet rocket booster is test-fired at Edwards Air Force Base, California.

An Aerojet rocket booster is test-fired at Edwards Air Force Base, California. U.S. Air Force

‘No Deal is Certain’: Raytheon CEO Says of Aerojet’s Pending Sale to L3Harris

After slamming an earlier proposal for the rocket maker, Greg Hayes is taking a different tack.

As regulators eye the proposed acquisition of Aerojet Rocketdyne, one of the rocket manufacturer’s top customers warned against assuming the deal would go through.

In “the current antitrust environment, no deal is certain until it is actually done, so we'll have to see how this plays out,” Raytheon Technologies CEO Greg Hayes said Tuesday on the company’s quarterly earnings call.

Hayes has not taken a public stance on L3Harris’ five-month effort to buy Aerojet for $4.7 billion. 

That’s in contrast to his 2021 effort to scuttle a proposal by rival Lockheed Martin to acquire the independent rocket maker. Lockheed eventually abandoned the deal after the Federal Trade Commission ruled that it would have given the company’s missiles division an unfair advantage over its competitors.

Since then, Hayes has been a vocal critic of Aerojet’s performance and work quality. Just a few weeks before L3Harris announced its intention to buy the rocket maker, he called Aerojet “the weak link” in Raytheon’s supply chain and said its leaders were distracted.

Hayes reiterated the concern on Tuesday. “There's always a concern, I think, when you have one of your key suppliers going through a merger or an acquisition is that they lose focus, delivery and quality,” he said, and urged Aerojet to “focus on delivery and not get distracted by this deal.”

Raytheon accounts for more than 20 percent of Aerojet’s annual sales.

In March, the FTC requested additional information about L3Harris’ proposed purchase. Such requests are often a harbinger of eventual objections, according to a Georgetown University analysis of merger enforcement statistics from 2000 to 2020.

Just 28 percent of proposed transactions that received a second request for information were approved as written, the paper found. About 40 percent were approved with consent decrees, another 30 percent were abandoned, and the few remaining deals went to trial.

The regulatory environment is even tougher now. The Biden administration’s FTC chair, Lina Khan, has taken a more aggressive approach toward antitrust enforcement.

Sen. Elizabeth Warren, D-Mass., who opposed Lockheed’s acquisition of Aerojet, similarly opposes L3Harris’ purchase on the grounds that it would reduce competition in the defense industry. 

Earlier this month, the Pentagon said it would invest $216 million to help the Aerojet Rocketdyne expand and modernize factories in Arkansas, Alabama, and Virginia that manufacture the rocket motors used in missiles the United States has given to Ukraine.

Some 99.7 percent of Aerojet shareholders approved the sale of the company to L3Harris.