Aerojet Rocketdyne Holdings Inc. has submitted a $2 billion bid to acquire United Launch Alliance (ULA), a spacecraft launch service provider that is a joint venture of Lockheed Martin Corp. and Boeing Co., a source familiar with the matter told The Wall Street Journal.
ULA is struggling to maintain its position as the premier supplier of rockets to the Pentagon.
One of the sources told The Wall Street Journal that the two sides are already in advanced talks in an all-cash offer.
A deal, though, hasn't been finalized and could still fall through with last-minute hurdles.
The source said that the acquisition would still be subject to a close analysis by Pentagon officials, according to The Wall Street Journal.
If no problem arises, the announcement of the deal could come as early as next week.
Reuters adds that a source said that discussions for the bid of ULA started in early August when a board member of Aerojet Rocketdyne approached officials from ULA, Lockheed, and Boeing.
Warren Lichtenstein, the chairman and CEO of Steel Partners LLC and a member of the board of Aerojet Rocketdyne, approached Tory Bruno, president of ULA, and senior officials of Lockheed and Boeing about the bid.
ULA's rockets have been reliable for the Pentagon as it has launched more than 90 rockets into orbit without any problems, according to The Wall Street Journal.
However, the prices for the rockets have turned out to be substantially higher than projected.
Reuters adds that the U.S. Air Force (USAF) is also eager to reintroduce a competitor to ULA in the market.
The USAF has been working hard to certify Space Exploration Technologies Corp., or SpaceX, to launch certain military and spy satellites.
Reuters adds that USAF also plans to end its $1 billion a year support to ULA that it has been providing for years.
This is due to the appearance of a new competitor.
ULA was formed in 2005, after nearly two years of negotiations, by the joint venture of Lockheed and Boeing, according to Reuters.
The Federal Trade Commission was opposed to the formation of ULA, but the two companies won by arguing that the joint venture would result in significant savings.
