WASHINGTON Aerospace company GenCorp Inc GY.N has been given U.S. antitrust approval to buy rocket engine manufacturer Rocketdyne at the request of the Defense Department, the Federal Trade Commission said on Monday.
The FTC said that it approved the deal, even though it would give GenCorp a monopoly in a certain missile defense segment, because the Department of Defense wanted to see the transaction go forward.
United Technologies Corp (UTX.N) agreed to sell the Rocketdyne space unit to GenCorp Inc last July for $550 million.
The FTC had said in a June 3 letter that it had found that the proposed transaction would create a monopoly in the market for very high-performance, small pressure-fed liquid propulsion systems called "liquid divert and attitude control systems," which are used in missile defense interceptors.
The Department of Defense, however, urged against stopping the deal, saying that the inputs were critical to the nation's missile defense.
It urged the FTC to allow the deal because of "highly unusual national security circumstances," according to a letter to the FTC dated June 6.
Rocketdyne, the world's largest manufacturer of liquid-fueled rocket propulsion systems, was one of three units United Technologies Chief Executive Louis Chenevert put on the block in an effort to fund the $16.5 billion takeover of Goodrich Corp in 2012.
United Technologies sold Rocketdyne for $150 million less than it paid for it more than seven years ago. It had purchased Rocketdyne from Boeing Co (BA.N) for $700 million in cash.
(Reporting by Diane Bartz; Editing by Gerald E. McCormick and Nick Zieminski)