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Ultra Electronics terminates Sparton deal
The proposed merger between the companies was initiated following Sparton’s decision to put itself up for sale back in April 2016 – now the deal has been terminated due to anti-trust concerns raised by the U.S. Department of Justice.
“We are disappointed with the outcome of the antitrust review that has led to Sparton's and Ultra's decision to mutually terminate the merger process. This decision means that the relationship between Ultra and Sparton continues for now as joint venture partners through the ERAPSCO JV.,” Douglas Caster, Executive Chairman of Ultra comments in a press release.
The US Navy has indicated that it is now considering ways to increase competition in the sonobuoy procurement process over time, including between Ultra and Sparton. he DOJ has stated that it intends to take steps to open an antitrust investigation into the ERAPSCO JV. Ultra says that the company is working closely with the US Navy during a transition to independently developing, producing and selling sonobuoys.
Ultra says that it will continue to fulfil its obligations with Sparton under the ERAPSCO JV, which has been supplying sonobuoys to the US Navy under an Indefinite Delivery Indefinite Quantity ('IDIQ') contract since 2014.
