Northrop Grumman, Orbital ATK, Scorpio Tankers and Neos Therapeutics - AFTER HOURS

Gladys Abbott
September 19, 2017

Northrop Grumman is to acquire Orbital ATK in a deal worth $9.2 billion, bringing together two of the primary defense contractors for the US military.

The deal comes on the heels of another big defense merger: Earlier this month, United Technologies Corporation (NYSE: UTX) said it was buying Rockwell Collins, Inc.

Northrop intends to run the Dulles, Virginia-based aerospace and defense contractor as its fourth business sector upon the deal's completion. Orbital ATK makes launch vehicles and their propulsion systems; missile technology, defense electronics, precision weapons, armament systems and ammunition. The price is 22 percent above the stock's closing level Friday.

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The all-cash deal for maybe north of $7.5B could be announced as soon as tomorrow, according to Dana Mattiloi's report.

Orbital's shares were trading at $131.70 before the bell. Orbital ATK shares jumped 1.5% immediately after the report Sunday, while Northrop Grumman rose about 0.5%.

Both companies expect to close the transaction in the first half of 2018, subject to approvals by Orbital ATK shareholders and regulatory authorities.

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