Patrick Durrant | Sydney
Aerospace and defence manufacturer Orbital ATK will be acquired by the world's fifth largest defence contractor Northrop Grumman in a US$9.2 billion deal.
Under the definitive agreement, Orbital will become a new fourth business division of Northrop. CEOs Wes Bush (Northrop) and David Thompson (Orbital) said during a pre-market teleconference this would allow both companies to maintain uninterrupted program performance. The transaction is expected to close in the first half of 2018 and is subject to customary closing conditions, including regulatory and Orbital ATK shareholder approval.
Bush said the acquisition will provide customers with expanded capabilities, accelerated innovation and greater competition in critical global security domains.
“Our complementary portfolios and technology-focused cultures will yield significant value creation through revenue synergies associated with new opportunities, cost savings, operational synergies, and enhanced growth,” he said.
Thompson, whose future role in the new structure has not been revealed, said the transaction will allow Orbital to maintain strong operational performance on existing programs while pursuing new opportunities that require the enhanced technical and financial resources of a larger organisation.
“We will remain focused on operational excellence and execution during and after the transition into Northrop Grumman,” he said.
Only two and a half years ago Orbital ATK was formed through a merger between Orbital Sciences Corporation and parts of Alliant Techsystems. The acquisition follows United Technologies Corporation's (UTC) recent $US30 billion purchase of avionics contractor Rockwell Collins.