Rocket maker Khrunichev takes control of US-Russian satellite launch firm ILS

31 May 2008

ILS currently uses only Proton rockets while Atlas rockets are operated by United Launch Alliance, a partnership between Lockheed Martin and Boeing.

The shares were purchased from Space Transport, based in the British Virgin Islands. With this deal, the marketing arm becomes a part of the manufacturing body. However, financial terms have not been disclosed.

The transaction puts all of ILS in Russian hands, with Moscow-based SP Korolev Rocket and Space Corp Energia, a semiautonomous company, owning a 17 percent stake.  Post acquisition, ILS will remain an American company at its present location in Delaware.

Some experts are of the opinion that Khrunichev has become increasingly focused on work for the Russian military in recent years and that the move to take control of ILS could be a way of pulling back from the commercial market.

Space Transport bought Lockheed Martin's 51 per cent stake in ILS in 2006. Space Transport was created in 2006 with the sole purpose of holding an interest in ILS, and its chairman is Mario Lemme, a longtime adviser to ILS who served on the company's board for three years. He has also invested in several other businesses in Russia.

"Building on our strong working relationship with the ILS team, this transaction will cement ILS's leadership role in the commercial launch services industry," said Vladimir Nesterov, general director of Khrunichev.