ST. LOUIS, Feb. 22, 2005 -- The Boeing Company [NYSE:BA] announced today that it has reached an agreement to sell its Rocketdyne Propulsion & Power business to Pratt & Whitney, a United Technologies company [NYSE:UTX], for approximately $700 million in cash.
The transaction is subject to regulatory approvals and other customary closing conditions. Boeing expects to recognize a gain on the sale.
Rocketdyne is primarily a rocket engine developer and builder, and provides booster engines for the Space Shuttle and the Delta family of expendable launch vehicles, as well as propulsion systems for missile defense systems. The divestiture includes sites and assets in California, Alabama, Mississippi and Florida. Approximately 3,000 people support the operations at those sites
"This transaction makes sense for Boeing, for Rocketdyne's employees and customers, and for Pratt & Whitney," said Jim Albaugh, president and chief executive officer of Boeing Integrated Defense Systems. "The acquisition of Rocketdyne by Pratt & Whitney will benefit our customers, as Pratt & Whitney is a company dedicated to the business of propulsion and is in the best position to build upon Rocketdyne's proud heritage. I have great confidence that the proud legacy of Rocketdyne from Mercury to Saturn V to the Space Shuttle will be in good hands. The sale also reinforces our strategic business aim to be horizontally -- not vertically -- integrated."
Albaugh said that Boeing would continue to build launch systems and that the divestiture would enable Boeing to serve its customers more effectively, while preserving the company's ability to contract with Rocketdyne for continued use of its capabilities and expertise.
"UTC companies are at the cutting edge of technology in all business segments and we believe Rocketdyne's rich heritage of technology excellence and innovation is a great addition to our portfolio," said Louis R. Chenevert, president of Pratt & Whitney. "We look forward to working with Boeing, NASA, the Department of Defense and other customers to continue the high level of service that Rocketdyne has always provided."
Rocketdyne Propulsion & Power was formerly owned by North American Aviation and Rockwell International, and has been the premiere rocket propulsion provider in the nation for more than a half-century. As part of Boeing Integrated Defense System's Launch & Orbital Systems segment, the business being divested generated nearly $700 million in revenue during 2004. Sales to Boeing have typically represented about a third of Rocketdyne's sales.
From its beginnings following World War II, Rocketdyne has been at the forefront in rocket engine development, testing and performance. In the 1950s, Rocketdyne engines put the first U.S. satellites into orbit, and the company continued as an integral part of the Mercury, Gemini and Apollo programs that put humans on the moon. Rocketdyne supplied the main engines for the Space Shuttle in the 1980s and has continued to build booster engines for Atlas and Delta expendable launch vehicles. And recently, Rocketdyne developed and has flown the RS-68, the first large liquid-fueled American booster engine in a generation.
Credit Suisse First Boston acted as financial advisor to Boeing on this transaction.
United Technologies, based in Hartford, Conn., is a diversified company that provides high technology products and services to the commercial building industry and the military and commercial aerospace industry. In addition to Chubb, Otis, Carrier and UTC Power, United Technologies' companies include Pratt & Whitney, Hamilton Sundstrand and Sikorsky Aircraft.
Pratt & Whitney is a world leader in the design, manufacture and service of aircraft engines, space propulsion systems and industrial gas turbines.
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