Reuters: Lockheed Eyes IT Business Combination with Another US Contractor

acquisition, mergerLockheed Martin (NYSE: LMT) has begun discussions about a possible combination of its government information technology and technical services businesses with a fellow U.S. contractor, Reuters reported Friday.

Mike Stone writes Lockheed is in early-stage talks with Booz Allen Hamilton (NYSE: BAH),  CACI (NYSE: CACI),  Leidos (NYSE: LDOS) and Science Applications International Corp. (NYSE: SAIC) over a potential tax-free merger deal for the business units, which Reuters estimates are worth a combined $4 billion.

The Bethesda, Maryland-based contractor announced a strategic review in July to determine whether it should sell or spin off some portions of the firm’s IT and government services business segments.

Lockheed said it expects to see a “mid-single-digit” percentage sales decline within its information systems unit for 2015 and could reduce the unit’s workforce by 500 employees.

The company also aims to expand its weapons development operations as it shifts away from the commoditized services market, the report said.

Check Also

SAIC

SAIC Awarded TSA Test & Evaluation Support BPA

Science Applications International Corp. (NYSE: SAIC) has been awarded a potential $40M blanket purchase agreement for operational test and evaluation services to the Transportation Security Administration, according to an award notice posted Thursday.

US Air Force

Air Force Selects Boeing, Lockheed, Raytheon Technologies for Hypersonic Cruise Missile Tech Design Program

The U.S. Air Force has indicated its intent to solicit design proposals from Boeing (NYSE: BA), Lockheed Martin (NYSE: LMT) and Raytheon Technologies (NYSE: RTX) for a hypersonic cruise missile technology that can be launched from a fighter or a bomber aircraft.