As the world prepares itself for the worst, one American defence company in particular is cashing in.
U.S. defense contractor Northrop Grumman Corp (NOC.N) is poised to announce a purchase of missile and rocket maker Orbital ATK Inc (OA.N) as soon as Monday, a person familiar with the transaction said on Sunday. – Via reuters.com
With tensions mounting around the world thanks to North Korea, Ukraine and Syria, Northrup Grumman’s announcement comes at a time of great possibility. As Reuters reports “the deal would come as the firing of missiles by North Korea in recent months has focused attention on missile defence systems.”
The deal is noteworthy not only because it boosts Northrop’s exposure to missile defence, but also because the company has not bought a large rival in many years. It would also represent a departure from a focus of returning earnings to shareholders.
The potential for this strategic shift by Northrup could put it at an advantage should the U.S. government find itself in the market for more missile defence options. As Reuters reports “another reason for the deal could be the Pentagon’s efforts to rebuild missiles defenses. The Air Force had asked the defense industry last summer for proposals to replace the aging nuclear cruise missiles and intercontinental ballistic missile system as the military moved ahead with a costly modernization of its aging atomic weapons systems.” If this is the case, Northrup will be one of the top options for the U.S. going forward.
To stay informed, why not sign up for our free financial newsletter?
[grwebform url=”https://app.getresponse.com/view_webform_v2.js?u=BKTzq&webforms_id=14431602″ css=”on” center=”off” center_margin=”200″/]
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…