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The rocket company owned by Amazon founder Jeff Bezos, Blue Origin, has emerged as the sole finalist to buy United Launch Alliance.
The sale is not official, and nothing has been formally announced. The co-owners of United Launch Alliance (ULA), Lockheed Martin and Boeing, have yet to comment publicly on the sale of the company, which, until the rise of SpaceX, was the sole major launch provider in the United States. They declined again on Wednesday.
“Consistent with our corporate practice, Boeing doesn’t comment on potential market rumors or speculation,” a Boeing spokesperson said.
Blue Origin did not return a request for comment.
However, two sources told Ars that Blue Origin is nearing the purchase of ULA. The sources said they have not personally seen any signed agreements, but they expect the sale to be announced within a month or two.
In the 11 months since Ars first reported that ULA was up for sale, the company’s potential buyer has become a topic of widespread speculation and interest. In November, Ars reported that Blue Origin was one of three potential buyers. In December, the Wall Street Journal confirmed that the competition was narrowing and said Blue Origin and a large private equity firm, Cerberus, were the two most likely bidders.
Bezos stock sales
Some recent related activity suggests the sale is imminent. A handful of senior officials at ULA are seeking new jobs. Additionally, Bezos recently sold $2.4 billion in Amazon stock and, in securities filings, disclosed that he could sell an additional $8 billion to $9 billion in stock over the next 12 months. Although there are no confirmed values, there has been speculation in the launch industry that ULA may be sold for $2 billion to $3 billion.
ULA was created in 2006 through a merger of Boeing’s Delta rocket program and Lockheed Martin’s Atlas launcher family. Since then, ULA has been a profitable enterprise for both aerospace giants, thanks to military launch contracts and (until recently) large annual subsidies from the US Department of Defense to maintain “launch readiness” for national security missions.
During the last decade, however, ULA’s launch dominance has first been challenged and then supplanted by the rise of SpaceX and its less expensive and highly reliable Falcon 9 rocket. Tory Bruno, who became ULA’s chief executive in 2014, has slashed employee headcount and taken other steps to control costs, such as closing infrequently used launch pads.
One of the key questions about the acquisition is what will happen to Bruno, who has demonstrated the ability to run a launch company with an excellent record of success, manage the development of a large new launch vehicle—the Vulcan rocket—and is willing to compete with SpaceX. It is unclear what role he would have in an acquisition by Blue Origin. Sources indicate that Bruno has a good relationship with Bezos.
Will the merger work?
There is considerable overlap in the launch businesses of ULA and Blue Origin. Vulcan and Blue Origin’s own large rocket, New Glenn, will both compete for government launch contracts, and both use the BE-4 rocket engines developed by Blue Origin. However, some synergies could make a combined Blue Origin-ULA a more formidable launch competitor to SpaceX.
ULA has operational launch pads at Cape Canaveral Space Force Station in Florida and Vandenberg Space Force Base in California. It has large integration facilities at both locations. Additionally, it has an experienced launch team with a long track record of success, which could be useful to Blue Origin as it seeks to launch the New Glenn rocket later this year.
Finally, ULA has some expertise in the storage of cryogenic fuels in space. For a time, before its co-owners shut down the program, ULA was developing an innovative upper stage known as ACES (Advanced Cryogenic Evolved Stage). This upper stage was intended to be reusable and powered by liquid oxygen and liquid hydrogen. These are the kinds of technologies that Blue Origin will need as it develops a lunar lander and tug spacecraft that uses these same propellants and requires them to be stored in space for long periods of time.
