Aerojet Not Giving Up on Bid For ULA Just Yet

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Reflecting what appears to be a state of increasing desperation, Aerojet Rocketdyne is not giving up on its bid for United Launch Alliance just yet. Reuters reports that after having seen its $2 billion offer rejected in a 2 sentence e-mail, Aerojet has hired outside consultants who may suggest upping the offer, or in the alternative, breaking up the company.

From the article:

“Aerojet Rocketdyne Holdings Inc is considering raising its $2 billion offer for United Launch Alliance, a rocket launch venture of Boeing and Lockheed Martin Corp, but faces big hurdles after a public rejection of the bid last week, according to multiple sources familiar with the matter.

Aerojet is meeting with outside advisers this week to explore its options, said the sources, who were not authorized to speak publicly about the discussions. One of the sources said the company could announce its next moves in coming weeks.

The company’s spokesman, Glenn Mahone, said the two companies remained in discussions about “a number of business arrangements,” but gave no details.

The sources said Aerojet faces an uphill climb given growing tensions between the two companies over the past few years. This week ULA dumped Aerojet as its solid rocket motor supplier and signed a long-term deal with its rival Orbital ATK which is not currently in that business.”
Note: The last sentence is incorrect. Orbital ATK supplies solid rocket motors to ULA for the Delta IV family of boosters.
As if the future prospects were not bad enough, the recent past has not been so friendly either. Another story, also from Reuters, reports that the company has agreed to pay Orbital ATK $50 million in the ongoing dispute over what led to the loss of an Antares booster nearly a year ago. On the bright side, if you can call it that, Aerojet is now the proud owner of 10 AJ-26 rocket engines which will almost certainly never be used on a launch vehicle:
“Aerojet Rocketdyne Holdings Inc will pay Orbital ATK $50 million to settle a dispute stemming from an Antares rocket launch accident last year that destroyed a load of cargo bound for the International Space Station, Aerojet said on Thursday.

The company also said it would take title to 10 AJ-26 rocket engines previously earmarked for Orbital, one of two companies hired by NASA to fly cargo to the station after the agency retired its space shuttles.

Orbital successfully flew two of eight planned missions under its original $1.9 billion contract with NASA before the Oct. 28, 2014, accident from Wallops Island, Virginia.

A final report on the botched mission is pending, though the companies have publicly disagreed about whether an engine manufacturing problem by Aerojet and/or mishandling of the engine during processing by Orbital triggered the explosion.”

There is a NASA angle to the ongoing issues at Aerojet.  If prior history holds true, there is a distinct possibility the loss of revenue from ongoing and anticipated future operations results will result in higher costs passed on to NASA for SLS work as the company seeks to manage the burden of increased overhead.

There is another matter of some interest. Given the growing divide between ULA and Aerojet-Rocketdyne, the future of the RL-10 upper stage engine which is currently used on both the Atlas and Delta family of boosters may be of some concern. While ULA has previously indicated it intends to continue using the engine on the ACES upper stage for the Vulcan booster, it has been working on a possible alternative through its partnership with XCOR.

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