Boeing, Lockheed Martin explore sale of United Launch Alliance to Sierra Space

Boeing (BA.N) and Lockheed Martin (LMT.N) are in discussions about selling their joint venture, United Launch Alliance (ULA), to Sierra Space.

The potential transaction could value ULA at approximately $2 billion to $3 billion. This move would represent a major shift in the U.S. space launch sector, transferring control from two of the largest defence contractors to a smaller, privately held company, Caliber.Az reports, citing foreign media.

The potential sale of ULA comes amid ongoing speculation about the joint venture's future, following unsuccessful attempts to divest it in previous years. Although Boeing and Lockheed Martin explored a sale in 2019, they could not finalize a deal with prospective buyers at that time. The current negotiations may also fall through, as noted by the sources.

ULA, a key provider of launch services to the U.S. government and a major competitor to SpaceX, was created in 2006 by merging Boeing's and Lockheed's rocket businesses. This consolidation ended their long-standing competition and solidified their control over government launch contracts. However, ULA has faced increasing competition from SpaceX, which has disrupted the market with its reusable Falcon 9 rockets. To compete, ULA developed its Vulcan rocket, which made its debut in 2023, but scaling production and meeting commercial demand have been challenging.

Sierra Space, spun off from Sierra Nevada Corp in 2021, is evaluating the acquisition of ULA as part of its broader ambitions, which include advancing its Dream Chaser spaceplane and developing a private space station in collaboration with Blue Origin. A successful acquisition would enable Sierra Space to internally manage launches for its projects, potentially accelerating its crewed spaceflight initiatives.

Boeing's potential sale of ULA aligns with a strategic shift under new CEO Kelly Ortberg, who assumed the role in August. Selling ULA would allow Boeing to focus on its core aerospace and defence sectors while generating cash from the sale.

In the early 2023 bidding process, Blue Origin, Cerberus Capital Management, and Rocket Lab expressed interest in acquiring ULA, but none of these discussions led to a final agreement. Rocket Lab, in particular, was reported to have shown interest but could not be reached for comment at this time.

The sale would free ULA from the influence of Boeing and Lockheed Martin, whose management has been cautious about expanding ULA into new competitive markets like lunar habitats or advanced spacecraft.