Aerojet gets development contract with Air Force

Aerojet Rocketdyne Holdings Inc. said Monday it has entered into an agreement with the Air Force and another aerospace company to develop a rocket engine system called the AR1.

Under the public-private partnership, Rancho Cordova-based Aerojet will work with United Launch Alliance, a company with which it has had a rocky relationship. Last fall, United Launch spurned a takeover bid from Aerojet and also announced it would no longer buy rocket boosters from Aerojet.

The deal with the Air Force calls for the government to put in two-thirds of the development dollars, with Aerojet and United Launch putting in the remaining third, for a total of $804 million. The Air Force wants to develop an American-made engine to replace the Russian-built RD-180 engines that are currently used to launch military rockets into space.

Aerojet shares closed at $15.53, down 13 cents, in regular New York Stock Exchange trading, which concluded before the Air Force program was announced. The company’s shares jumped 7 cents, to $15.60, in after-hours trading.

This story was originally published February 29, 2016 at 2:51 PM with the headline "Aerojet gets development contract with Air Force."