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17 Jun 2002
Northrop Grumman Corporation of Los Angeles, California, in the US, is to take over Litton Industries in a cash transaction worth USD 5.1 billion including USD 1.3 billion of Litton net debt. Northrop will pay USD 80 per common share and USD 35 per Series B Preferred share initiated 5 Jan 2001 for all Litton stock.
The move creates one of the world's largest defense companies in the fields of systems integration, defense electronics and information technology. Northrop had worldwide sales of USD 7.6 billion last year and employs 39,000 people. Litton employs 40,000 and the combined revenues of the two companies are expected to reach USD 15 billion this year.
According to Northrop chairman Kent Kresa, the take over will heighten Northrop's status as a premier systems and sensor integration leader by expanding into navigation and guidance systems for airborne platforms and other military avionics systems.
Litton will be operated as a wholly owned subsidiary of Northrop, following the close of the transaction, which is expected in the first quarter of this year. Ronald Sugar, currently Litton's president and CEO, will become a Northrop Grumman corporate vice-president and president and CEO of the new Litton subsidiary. Michael Brown, Litton's chairman and CEO, is to retire.
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