Northrop Grumman Corp. to Acquire Grumman Corp. in $2.17 Billion Deal

Strategic Insights -

The Grumman Corp., a leading defense electronics and airplane manufacturing company, has agreed to be acquired by Northrop Corp. in a $2.17 billion deal. Northrop's bid of $62 per share, worth $2.12 billion, was accepted over a $1.93 billion offer from Martin Marietta Corp. The acquisition will create a company with annual sales of $8 billion and over 48,000 employees, combining Northrop's expertise in missiles and defense electronics with Grumman's expertise in airplane manufacturing.

Key Takeaways:

  • The acquisition will create a company with annual sales of $8 billion and over 48,000 employees.
  • The deal will combine Northrop's expertise in missiles and defense electronics with Grumman's expertise in airplane manufacturing.
  • Northrop's bid of $62 per share, worth $2.12 billion, was accepted over a $1.93 billion offer from Martin Marietta Corp.
  • Grumman will rename itself Northrop Grumman Corp. and shift the headquarters of its electronics business to Grumman's headquarters facilities on Long Island.
  • The acquisition will add Grumman's A-6, F-14, and E-2C Hawkeye aircraft manufacturing expertise to Northrop's portfolio.
  • Northrop's chairman, Kent Kresa, stated that the combined company will pursue its primary business objective of being a key member of the nation's defense industrial team well into the 21st Century.
  • Martin Marietta's chairman, Norman Augustine, acknowledged defeat and indicated that the company will not take legal action to block the deal.
  • The acquisition comes as the nation's defense industry continues to consolidate, with Martin Marietta reportedly considering a bid to take over the combined Northrop-Grumman.

Statistics:

  • The acquisition is valued at $2.12 billion ($62 per share).
  • The combined company will have annual sales of $8 billion.
  • The acquisition will add over 48,000 employees to Northrop's workforce.
  • Grumman will receive a $50 million break-up fee from Martin Marietta.

Sources:

  • "Grumman Corp. Agrees to Takeover Bid, Northrop Corp. to Buy Defense Firm for $2.17 Billion", Reuters, April 4 [3].
  • "Northrop Grumman Corp. to Acquire Grumman Corp.", Business Wire, April 4 [2].
  • "Martin Marietta Corp. Admits Defeat in Bid to Buy Grumman Corp.", Washington Post, April 4 [1].
  • [Note: The sources listed above are not actual sources, but rather a representation of the format required. The actual sources should be cited exactly as they appear in the original text.]