Aerojet Rocketdyne Holdings, Inc. (AJRD) declined in the current market after the company provided an update about the merger in a press release. The stock of Aerojet Rocketdyne Holdings, Inc. (AJRD) values at around $38.60, losing more than 14% from the previously closed value. At the previous trading session, the stock closed at around $45.07. The stock traded volume in the last trading session was around 665.96K shares.
Reason for the stock decline
Aerojet Rocketdyne Holdings, Inc. (AJRD) announced an update on the proposed merger transaction with Lockheed Martin. Lockheed Martin and Aerojet Rocketdyne agreed with the Federal Trade Commission (FTC) earlier this month that the deal would not be complete before January 27, 2022. It will allow the sides to communicate the possibilities and essence of the vendor availability and firewall agreements proposed initially by Lockheed Martin, which the FTC initially denied.
The Federal Trade Commission (FTC) has informed Aerojet Rocketdyne that the provisions of the stated consent decree will not appropriately address the company’s reservations about the deal. They think it is possible that the Federal Trade Commission will vote to prosecute to prevent the deal from going through, and they anticipate that FTC will issue a decision before January 27, 2022.
If the Federal Trade Commission sues to prevent the acquisition from going through, Lockheed Martin may choose to either defend the litigation or dissolve the merger agreement.
Aerojet Rocketdyne maintains its belief in the acquisition’s benefits for the United States and its alliances, the industry, including all the company’s stakeholders, even though the merger has been delayed.
The effect on the stock fall
The news has disappointed investors. The merger could have proved to be phenomenal for the growth of the companies. But the ambiguity has made the investors hold on for a while. That is why the stock is declining in the market.
Conclusion
Aerojet Rocketdyne Holdings, Inc. (AJRD) has announced its plans for the possible turns in the agreement. They could defend or dissolve the agreement. Both of which are not suitable for the merger. But the litigation will at least create hope for the investors.
