By Joey Roulette and Mike Stone
WASHINGTON (Reuters) – Boeing and Lockheed Martin are in talks to sell their rocket launch joint venture United Launch Alliance to Sierra Space, two people familiar with the talks said.
According to the sources, a deal could value ULA at around $2 billion to $3 billion.
A deal to sell ULA, a major provider of launch services to the U.S. government and a strong competitor to Elon Musk’s SpaceX, would mark a significant shift in the U.S. space industry as ULA splits off from two of the largest defense contractors and becomes a smaller, private company.
The potential sale comes after years of speculation about ULA’s future and failed attempts to divest the joint venture over the past decade. In 2019, Boeing and Lockheed Martin reportedly considered selling ULA but were unable to agree on terms with potential buyers.
The negotiations could end without an agreement, the sources said.
ULA referred Reuters to Boeing and Lockheed for comment. The two companies said they do not comment on market speculation. Sierra did not immediately respond to a request for comment.
Jeff Bezos’ Blue Origin and Cerberus Capital Management had made offers for the company in early 2023, people familiar with the negotiations say. Rocket Lab has also expressed interest, two people said. None of those talks resulted in a deal. Rocket Lab could not immediately be reached.
A possible deal would be an ambitious move for Sierra Space, which was spun off from Sierra Nevada Corp. in 2021 to focus on launching its long-delayed Dream Chaser spaceplane and building a private space station habitat with Blue Origin. Sierra Space has considered an IPO.
A potential deal could accelerate the expansion of the human spaceflight business, analysts said. A ULA acquisition, they said, would give the company internal access to launch vehicles that could put its spaceplane and space station components into Earth orbit, rather than spending hundreds of millions of dollars on those launches as a customer.
For Boeing, the potential sale of ULA is a strategic move under new CEO Kelly Ortberg, who took the helm in August. A deal would allow Boeing to focus on its core aerospace and defense businesses while also reaping some cash from the sale of ULA.
ULA was formed in 2006 as a merger of the competing rocket businesses of Boeing and Lockheed, ending years of rivalry between the two companies and cementing their dominance in the government launch services market – the primary mission of the joint venture’s charter.
The rise of SpaceX and its reusable Falcon 9, which spurred a satellite industry looking for cheaper access to space, forced ULA to replace its decades-old Atlas and Delta rockets with its new, cheaper Vulcan rocket, which will make its first launch in 2023.
However, ULA faced the challenge of scaling Vulcan production and increasing the launch rate to meet commercial demand and fulfill contractual obligations to the Space Force, which selected Vulcan for a significant portion of national security missions in 2021 alongside SpaceX’s Falcon fleet.
A sale of ULA would detach the company from the position of Boeing and Lockheed. According to former executives, their boards have long resisted ULA’s ideas of expanding the business beyond rockets into new, competitive markets such as lunar habitats or maneuverable spacecraft.
(Reporting by Joey Roulette and Mike Stone in Washington; Editing by Chris Sanders and Rod Nickel)
