Aerojet Rocketdyne’s acquisition of a 50% stake in engine reseller RD Amross from United Technologies Corporation (UTC) has fallen apart.
The transaction, agreed two years ago, failed because certain regulatory approvals from the Russian government…
Aerojet Rocketdyne’s acquisition of a 50% stake in engine reseller RD Amross from United Technologies Corporation (UTC) has fallen apart.
The transaction, agreed two years ago, failed because certain regulatory approvals from the Russian government could not be obtained, according to a filing with the SEC.
In April, Aerojet Rocketdyne exercised the fourth and final three-month delay period written into the deal in a last ditch bid to get it over the line, but Russia refused to green-light the transaction.
RD Amross is a controversial joint venture between UTC and engine-maker NPO Energomash that sells on Russian-made RD-180 engines to launch provider United Launch Alliance (ULA).
The transfer of the 50% stake was part of a larger deal which involved Gencorp buying Rocketdyne from UTC in June 2013 to create Aerojet Rocketdyne. The terms of the deal allowed the RD Amross stake to stay with UTC beyond the closing of the rest of the transaction as a longer regulatory review was anticipated.
Based in Florida, RD Amross has come under fierce criticism from US Senator John McCain. He wants to end funding for future purchases of the engines as it enables a Russian state-owned company to profit, and is unhappy about the role of a reseller in the process which pushes up the price.
RD Amross buys RD-180s from NPO Energomash for US$20.2m apiece and sells them on to ULA for US$23.4m, according to a contract seen by Reuters. Over the course of the 2014-2017 accord, RD Amross will sell ULA 29 engines and reportedly earn US$93m from mark-ups, the report said.
ULA is responsible for more than 70% of US government rocket launches and its main rocket, Atlas 5, is reliant on the RD-180 to get payloads to orbit.
The US Air Force posted a Request for Information (RFI) last August calling on the domestic industry to propose replacements for the RD-180 following Russia’s annexation of Crimea.
ULA has subsequently unveiled the next-generation Vulcan rocket family which will be powered by the US-made BE-4, produced by Blue Origin, although an initial version is not scheduled to be ready until 2019. In May, SpaceX’s Falcon 9 received clearance to compete with ULA to launch future Air Force missions.
