Northrop's deal, worth dollars 62 a share, saw off its defence rival Martin Marietta, which refused to increase its offer from the dollars 55 a share announced a month ago when Grumman agreed a merger. Northrop stepped in three days later with an offer of dollars 60 a share. It agreed to raise the price during protracted talks at the weekend.
The takeover brings together two of the Pentagon's smaller aircraft contractors and is regarded as Northrop's best hope of surviving the consolidation in America's arms industry. Grumman, once the US Navy's main source of fighter jets, now focuses on reconnaissance aircraft and airborne surveillance equipment.
Documents released yesterday show that Northrop was willing to pay as much as dollars 66 a share if Martin Marietta had decided to engage in a bid war. Its chairman, Norman Augustine, said yesterday that increasing its offer was not in the best interests of investors.
The new company, to be known as Northrop Grumman, will have combined sales of dollars 13bn and outstanding orders for more than dollars 13bn worth of equipment. It will also employ around 40,000 people.Reuse content