Lockheed Martin Open to Deals, Mum on Sikorsky

By Doug Cameron 

The head of Lockheed Martin Corp. on Wednesday declined to comment on whether the company was interested in buying all or part of Sikorsky Aircraft Corp., but said the defense company had the financial capacity for large deals.

Lockheed Martin is among the companies exploring bids for the helicopter maker, The Wall Street Journal reported earlier this month, but such a move would mark a strategic shift as the world's largest defense company has hitherto focused on providing systems for rotorcraft rather than manufacturing and assembly.

"I'm not going to speculate about what we're going to do," said Lockheed Martin Chief Executive Marillyn Hewson, when asked about Sikorsky at an industry conference in New York.

United Technologies Corp. announced plans earlier this year to explore strategic alternatives for Sikorsky, the Pentagon's largest helicopter supplier, and aims to complete a review in the summer, with a spinoff viewed as the most likely option.

Sikorsky had sales of $7.5 billion last year and could fetch $10 billion in a full sale, according to people familiar with the review.

Lockheed spent around $900 million on a series of small acquisitions last year, but Ms. Hewson didn't rule out larger deals if opportunities arose.

"We have great debt capacity," she said, adding that the company remains committed to returning most of its free cash to shareholders over the next three years.

Lockheed is already a partner with Sikorsky on programs including a planned new rescue helicopter for the Air Force and the replacement for the rotorcraft used as Marine One by the U.S. president. Lockheed has traditionally focused on providing electronic systems rather than building the helicopter platforms.

Boeing Co. and Airbus Group NV are also among the companies exploring bids for Sikorsky or, alternatively, for a minority stake.

Write to Doug Cameron at [e-mail]

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