Aerojet Rocketdyne Makes $2B Offer for United Launch Alliance
WASHINGTON – 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.
Aerojet Rocketdyne's bid starts at $2 billion, but could go higher after the company does its due diligence, the source said.
ULA faces an uncertain future owing to a congressional ban on the Russian-built RD-180 engine that powers its workhorse, the Atlas V, and a competitive challenge in its government market from upstart SpaceX. Congress appears willing to fund a U.S.-built RD-180 replacement, and Aerojet Rocketdyne is developing one called the AR-1, but ULA last September announced plans to use an alternative built by the secretive Blue Origin rocket company owned by Amazon.com founder Jeff Bezos.
Kent, Washington-based Blue Origin's planned BE-4 uses a different type of fuel than the RD-180 and as such cannot be retrofitted into the current Atlas V design. ULA, which plans to phase out all but the largest variants of the high-priced Delta IV, in April unveiled a new rocket design called Vulcan that accommodates the BE-4. The new vehicle, to debut around 2020, would essentially be an Atlas 5 outfitted with a new, larger first stage, at least in its initial incarnation.
But Boeing and Lockheed Martin, who control ULA's purse strings, have yet to agree to invest the roughly $1 billion that ULA says it needs to develop the Vulcan. Blue Origin is funding development of the BE-4, also to the tune of about $1 billion, ULA says.
Spokesmen for Sacramento, California-based Aerojet Rocketdyne, Boeing and Lockheed Martin declined to comment. Jessica Rye, a spokeswoman for ULA, referred questions to Lockheed Martin and Boeing.
In May, a consortium of three companies including Aerojet Rocketdyne asked the U.S. Department of Defense about the possibility of obtaining production rights to the Atlas V. ULA rebuffed that overture.
A purchase of ULA, if approved by the parent companies and the government, would be a dramatic turnaround for Aerojet Rocketdyne, which was stung by ULA's decision to go with the BE-4 over the AR-1. ULA continues to fund work on the AR-1, but views that engine as a backup in case Blue Origin falters in its engine effort.
