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Old 06-07-2018, 08:47 AM
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Arrow Northrop Grumman completes acquisition of Orbital ATK

Northrop Grumman completes acquisition of Orbital ATK
Charles Forrester, London - IHS Jane's Defence Industry - 07 June 2018
RE: http://www.janes.com/article/80704/n...of-orbital-atk

Northrop Grumman announced on 6 June that it had completed the long-awaited acquisition of Orbital ATK.

First announced in September 2017, Northrop Grumman has paid USD7.8 billion in cash for Orbital ATK, along with the assumption of a further USD1.4 billion in debt.

The acquisition was finally closed after Northrop Grumman received clearance from the US Federal Trade Commission (FTC) on 5 June.

The transaction had restrictions imposed upon it by the FTC, following a regulatory review. In granting clearance for the deal to proceed, the FTC mandated that the company separate the operation of its solid rocket motor (SRM) business to ensure that competition could remain in the marketplace.

“Following the acquisition, Northrop Grumman will be one of only two viable suppliers of SRMs for US government missile systems, and the dominant supplier of large SRMs for long-range strategic missiles” the FTC said in its judgement.

“The choice of SRM can have a significant impact on the final determination of a missile system prime competition because the propulsion system is a critical element of the overall missile design.”

The agreement also noted that there are “significant barriers to entry into the development, manufacture, and sale of both SRMs and missile systems in the United States.” As a result, the FTC noted, it would be extremely difficult and costly for a new entrant to establish the technological expertise and facilities necessary to compete successfully.

As a result, the company has been required to agree that rocket-motors can be supplied on a non-discriminatory basis to other prime contractors that are competing for missile system contracts with the US government. Firewalls are also to be established so that any intellectual property that the company receives from competitors for missile contractors utilising their motors is not transferred to give Northrop Grumman a strategic advantage.
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