US: Pentagon official: “No fundamental concern” over defense consolidation

On Tuesday, November 13, DOD Undersecretary of Defense for Acquisitions Ellen Lord told Reuters that the government is still reviewing a merger of Harris Corp and L3 Technologies, but that she had no fundamental concerns about further consolidation in the US defense sector.

Ms. Lord said that the Defense Department is carrying out a detailed process together with antitrust authorities to determine if the proposed merger would “be problematical in terms of the competitive landscape.”

“We’re working through the process. We look at deals based on the individual merits,” Lord said on the sidelines of a NATO industry conference. She added that the CEOs of both companies had contacted her about their plans “very professionally” before announcing the deal.

For years, the Pentagon discouraged consolidation among top-tier contractors while welcoming deals from smaller players. In 2015, then-Defense Secretary Ash Carter warned that further consolidation in the weapons industry could lead to higher costs, decreased innovation, and less competition just days after Lockheed Martin’s US$9 billion acquisition of Sikorsky Aircraft was approved by regulators.