Defense manufacturing giant Lockheed Martin has bought rocket maker Aerojet Rocketdyne for $4.4 billion, boosting further its space portfolio even as competition from SpaceX and Blue Origin is heating up. The acquisition was announced late on Sunday. Lockheed is paying $56, as much as 33 percent above the Friday closing price, per every share of Aerojet.

"Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer," Lockheed Martin CEO James Taiclet said. The deal is expected to be completed during the second half of next year. The two companies are positive about getting regulatory approval for the deal.

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Lockheed Martin is reportedly the major contractor for US’ $620 million package to upgrade Taiwan's Patriot surface-to-air missiles system Lockheed Martin Corporation

The two companies have already been working together, with more than 35 percent of Aerojet's sales coming in from Lockheed. Aerojet gets roughly as much business from the U.S. government and Raytheon Technologies. Lockheed is using Aerojet Rocketdyne's propulsion systems in its aeronautics and missile products.

"This transaction enhances Lockheed Martin's support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology." Taiclet added in the statement.

Competition Heating Up

Over the last few years, investors have warmed up to the space sector as the latest advances have made reusable rocket technology more cost effective. Innovations by SpaceX, Stable Road Acquisition, Virgin Galactic and Momentus are driving this sector.

"As part of Lockheed Martin, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration," Aerojet's CEO Eileen Drake said.

Aerojet Rocketdyne is a subsidiary of Aerojet Rocketdyne Holdings, Inc. The company has a global footprint and offers propulsion systems and energetics to the space, missile defense and strategic systems, and tactical systems areas. It has been working with leading companies in aerospace and defense.