New M&A Concern: National Security

The Pentagon and other U.S. agencies will soon propose legislation that would allow regulators to block proposed corporate mergers based on national security concerns. Defense Undersecretary Frank Kendall has previously raised concerns about consolidation among the major companies within the U.S. weapons industry after Lockheed Martin Corp.’s $9 billion takeover of Sikorsky Aircraft from United Technologies Corp., in September. Pentagon officials have said further consolidation could lead to higher costs, decreased innovation, and less competition in the weapons industry.