The U.S. Department of Defense has awarded Lockheed Martin Corporation (NYSE:LMT) a $969 million contract to supply 17 military aircrafts of the C-130J type. The contract life is five years and will come to a close by April 2024. The contract from the U.S. military comes hot on the heels of the $9 billion acquisition of Sikorsky Helicopter by Lockheed.
The Pentagon has disclosed that it awarded Lockheed Martin Corporation (NYSE:LMT) the contract to build 17 military transport planes of the C-130J model. The contract is valued at $969 million and is expected to run for five years.
Verbal agreement
The announcement of the deal follows a previous disclosure by Lockheed about a verbal agreement with the U.S. Air Force involving the supply of about 83 planes of the C-130 J Super Hercules type. The company said at the time that the military transport planes would be delivered to the Coast Guards, Marine Corps and Air Force. However, Lockheed didn’t disclose the preliminary value of the deal.
Special aircrafts
The C-130J planes are special kind of aircrafts capable of taking off and landing on makeshift runways. As such, the aircrafts are commonly used for aerial refueling, search/ rescue operations, relief missions and close air support.
Lockheed has supplied the same type of aircraft to some 16 countries. The company has already delivered or is in the process of delivering 330 such planes.
$9 billion buyout
The U.S. military C-130 J comes after Lockheed recently closed the $9 billion buyout of United Technologies’ Sikorsky Helicopter. The acquisition of Sikorsky Helicopter is the largest deal that Lockheed has closed in nearly 20 years since the purchase of Martin Marietta.
With the acquisition of Sikorsky Helicopter, the maker of Black Hawk helicopters, it is apparent that Lockheed is betting on increased defense spending. Military hardware budgets have appeared to be shrinking in the recent times.
The acquisition of Sikorsky effectively makes Lockheed the largest military helicopters maker in the world. Additionally, the deal will help diversity Lockheed’s defense revenue and break its reliance on F-35 Joint Strike Fighter.
Dubai Airshow didn’t go without a deal for Lockheed as the company was awarded a $262.8 million contract to service certain Saudi Arabia’s defense systems.
