[ad_1]
Harris
Corp.
HRS 0.42%
and
L3 Technologies
Inc.
I GO 0.31%
are coming closer to a merger agreement, an agreement that would bring together two major communications and defense electronics suppliers with a combined market value of approximately $ 33.5 billion.
The companies were in advanced talks Friday to regroup in a purchase agreement that they intended to sign this weekend, according to people close to the file. The exact terms under discussion could not be learned, but the companies were supposed to market the transaction as a merger of equals.
Such negotiations are always fragile and it is possible that they break before an agreement is reached.
Based in Melbourne, Florida, Harris is a provider of communications and electronics systems for military and civilian use. Its systems are used for battlefield communications as well as first responders and for GPS weather monitoring and air traffic control.
Harris, a printing press company founded more than 100 years ago, has an annual business turnover of more than $ 6 billion and a market value of $ 18.2 billion. Its shares fell sharply last week, as did those of L3, following market turmoil sparked by concerns over rising interest rates. Both stocks have increased steadily in recent years.
New York-based L3, worth $ 15.3 billion, also provides communications and electronics equipment to the military, homeland security and civil aviation sectors. The company manufactures aerospace and communications systems, sensors and other electronic products for the US Army, Navy and other customers. Its systems are used in pilot training, aviation safety and for applications such as night vision.
The increase in military spending under President Trump, coupled with rising defense budgets in other countries and the boom in commercial jet sales fueled a wave of talks in the United States. the aerospace and defense sectors.
Continuing the trend towards consolidation: defense contractors are looking to increase production in-house to better control the supply chain and gain additional benefits from repair work, while ministries grant IT contracts more important.
Last year,
United Technologies
Corp.
agreed to buy
Rockwell Collins
Inc.
$ 23 billion in an agreement that would create one of the largest aircraft equipment manufacturers in the world. The agreement has not yet received the approval of the regulators and has not yet been finalized. A year earlier, Rockwell had agreed to buy B / E Aerospace Inc. for about $ 6 billion.
Earlier this year,
Northrop Grumman
Corp.
has entered into an agreement to acquire the Orbital ATK Inc. defense contractor for nearly $ 8 billion. And this week,
TransDigm Group
Inc.
has agreed to purchase the aircraft components manufacturer Esterline Technolgies Corp. at a price of $ 4 billion, including debt, at a significant premium to the company's market.
In April,
General Dynamics
Corp.
, maker of Abrams tanks and Gulfstream business jets, bought CSRA Inc. for nearly $ 7 billion after winning a battle to buy the federal IT provider.
Ten years ago, Harris was planning to sell, the Wall Street Journal reported at the time, but decided not to move forward because bids were too low.
L3 General Manager Chris Kubasik is committed to creating a leading sixth-tier defense contractor, alongside
Lockheed Martin
Corp.
,
Boeing
Co.
,
Raytheon
Co.
Northrop Grumman Corp. and General Dynamics Corp., expanding through a series of small acquisitions. Harris CEO Bill Brown propelled the company to the forefront of entrepreneurs in 2015 with the $ 4.6 billion purchase of Exelis Inc.
-Doug Cameron contributed to this article.
Write to Dana Mattioli at [email protected] and Dana Cimilluca at [email protected]
Source link
