![The Sikorsky R-4 was the world's first large-scale mass-produced helicopter and the first helicopter used by the US Army Air Forces, Navy, Coast Guard, and the UK's Royal Air Force and Royal Navy. Credit:USAF [Public domain], via Wikimedia Commons](http://yaffa-cdn.s3.amazonaws.com/adm/images/dmImage/StandardImage/Sikorsky_R4B_web_65728C90-2F3B-11E5-99E306EE95C51C2D.jpg)
Reuters has reported that Lockheed Martin Corp has agreed to buy United Technologies Corp's Sikorsky Aircraft for over US$8 billion.
The purchase gives the manufacturer of the Joint Strike Fighter a dominance in weapons making - it already has annual revenues of around US$45 billion and is way ahead of competitiors Boeing and Northrop Grumman.
Lockheed can now be less reliant on its US$391 billion F-35 fighter jet business, while expanding its overseas sales by adding Sikorsky's Black Hawk helicopters to its diverrse product line.
Sikorsky will be Lockheed's largest acquisition since it bought Martin Marietta Corp for about US$10 billion two decades ago.
"Sikorsky will be Lockheed's largest acquisition since it bought Martin Marietta Corp for about US$10 billion two decades ago."
According to Reuters sources, Textron Inc, parent of Bell Helicopter, had submitted a bid for Sikorsky, but dropped out of the bidding after the price rose. Both helicopter makers have seen revenues drop due to lower demand from the oil and gas sector.
Pentagon officials last week said they would carefully evaluate any sale of Sikorsky, saying it was important to the department to maintain competition and avoid market distortions. The US Defense Department can object to a merger involving its key suppliers during a federal antitrust review, which in this case could be led by the US Justice Department.
Industry executives do not expect antitrust objections since Lockheed does not build helicopters, but said US officials could ask for certain written assurances given Lockheed's expanded scale.
Industry executives have long predicted further consolidation in the US defence market after a massive contraction in the 1990s after the Cold War. The only sector that had remained largely unscathed was the helicopter market. Boeing, which makes CH-47 Chinook helicopters and works with Bell on the V-22, has already teamed up with Sikorsky to develop a next-generation helicopter for the US military.
Reuters sources said that Lockheed decided to proceed with the deal, despite the hefty price tag, because it views Sikorsky as a "signature company" that will ensure strong revenues in the medium term, when F-35 production begins to taper off.
Lockheed and Sikorsky already work together on several major helicopter programs, including the presidential helicopter, a combat rescue helicopter and the MH-60R- and S-model helicopters built for the Navy and Marine Corps.
Lockheed is keen to preserve the Sikorsky brand, the Reuters sources said, which means the company may well allow Sikorsky to continue functioning as a standalone business instead of integrating it into its already huge Aeronautics division, which had revenues of over $14 billion last year.