Exclusive: Lockheed to buy United Tech's Sikorsky for over $8 billion

WASHINGTON (Reuters) - Lockheed Martin Corp , the largest U.S. weapons maker, has agreed to buy United Technologies Corp's Sikorsky Aircraft unit, the maker of Black Hawk helicopters, for over $8 billion, a source familiar with the negotiations said on Sunday.

The two companies plan to announce the deal on Monday before both report second-quarter results on Tuesday, said the source, who was not authorized to speak publicly.

It will be Lockheed's largest acquisition since it bought Martin Marietta Corp for about $10 billion two decades ago, and the first major strategic move for both United Tech Chief Executive Officer Greg Hayes, who was elevated to CEO from finance chief in November, and Lockheed CEO Marillyn Hewson, who took over her job in January 2013.

Officials at United Technologies and Lockheed declined comment.

Textron Inc had submitted a bid for Sikorsky, but dropped out of the bidding after the price rose, according to several sources familiar with the matter.

Pentagon officials last week said they would carefully evaluate any sale of Sikorsky Aircraft, the U.S. military's largest helicopter supplier, and it was important to the department to maintain competition and avoid market distortions.

The U.S. Defense Department can object to a merger involving its key suppliers during a federal antitrust review, which in this case could be led by the U.S. Justice Department.

Industry executives do not expect the Pentagon to block the deal, since Lockheed does not build helicopters, but said officials could ask for certain written assurances given the increased scale of Lockheed, which already posted over $45 billion in revenues in 2014.

Combined with Sikorsky, Lockheed will dwarf the defense businesses of its nearest competitors, Boeing Co and Northrop Grumman Corp , although the company is seeking to shed some of its lower-margin services businesses, sources said.

"If they approve this sale, how could they object to a merger among the other primes?" said one industry executive who asked not to be named.

United Technologies said in March that it would explore alternatives for Sikorsky, which accounted for $7.5 billion in sales last year out of total UTC revenues of $65 billion.

(Additional reporting by Mike Stone; Editing by Andrew Heavens and Andrea Ricci)

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