Lockheed-Sikorsky Deal Stokes Fears About Industry Consolidation

The Pentagon’s top arms buyer worries that Lockheed Martin’s upcoming $9 billion acquisition of Blackhawk helicopter maker Sikorsky is part of a bad trend in which large defense firms get bigger and competition wanes.

The Defense Department will not block the purchase, but “we believe that these types of acquisitions still give rise to significant policy concerns,” Frank Kendall, undersecretary for acquisition, told reporters Wednesday. “The Department of Defense is concerned about the continuing march toward greater consolidation in the defense industry at the prime contractor level.”

Pentagon leaders have been expecting an uptick in industry mergers for several years. In 2011, Ash Carter — then the acquisition chief, now defense secretary — warned that the Pentagon would not support mergers among the biggest companies.

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