Defense contractor L3Harris Technologies (NYSE: LHX) is making a bold bet with its planned $4.7 billion acquisition of Aerojet Rocketdyne (NYSE: AJRD) , paying up to win a bidding war for the maker of rockets and other propulsion systems.
For L3Harris, the deal continues a flurry of M&A moves since the company's formation in 2019 following the merger of L3 Technologies and Harris Corp. L3Harris is paying a premium to what Aerojet was offered by Lockheed Martin just more than a year ago, despite Aerojet being viewed as a wounded company in need of a partner after that Lockheed deal fell apart due to regulatory concerns.
While there are risks to this transaction, especially in the near term, the deal is a solid move for L3Harris and can be an important step in the company's bid to establish itself among the nation's top defense contractors . Here's what L3Harris investors need to know about the company's latest move.
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Here's Why L3Harris' Latest Merger Gambit Will Pay Off for Investors