After Lockheed-Sikorsky Merger, Pentagon Opposed To Future Such Deals

Apprehending hindrances to competition and innovation, the US department of defense has emphasized on opposing future deals similar to Lockheed Martin’s acquisition of Sikorsky.

Pentagon procurement Chief Frank Kendall was quoted as saying by Reuters Wednesday that the Defense Department would not dispute Lockheed’s $9 billion agreement to purchase Sikorsky, but said “it still gives rise to significant policy concerns.”

He said, the department would ask Congress to "explore additional legal tools and policy" to ensure the defense industrial base remains diverse.

"This transaction is the most significant change at the weapon system prime level since the large-scale consolidation that followed the end of the Cold War," Kendall said. "This acquisition moves a high percentage of the market share for an entire line of products (military helicopters) into the largest defense prime contractor, a contractor that already holds a dominant position in high-performance aircraft due to the F-35 winner-take-all approach adopted over a decade ago."

Kendall also said “with size comes power, and the department's experience with large defense contractors is that they are not hesitant to use this power for corporate advantage.”

Lockheed Martin disagrees with the Pentagon’s statement. "There is no evidence to support the view that larger defense companies reduce competition or inhibit innovation," Lockheed spokesman Dan Nelson said in statement.

"We believe that defense contractors should continue to be assessed based on the performance and effectiveness of the products and solutions offered, not on the size of their company," he said.