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You are here: Home / Government Contracting News / For U.S. defense contractors, North Korean hostilities are good for business

October 3, 2017 By AMK

For U.S. defense contractors, North Korean hostilities are good for business

North Korea is making the world uneasy with its missile launches. It’s also driving business for defense contractors.

 

Take, for example, US defense giant Northrop Grumman’s planned $7.8 billion purchase of Orbital ATK, a smaller contractor focused on aerospace and missiles. As part of the deal—announced Monday (Sept. 18) and subject to regulatory approval—Northrop said it will pay $134.50 for each Orbital share, a 22% premium on Friday’s closing price, and assume $1.4 billion in net debt.

What makes Orbital so attractive? The tensions surrounding North Korea certainly don’t hurt.

In a call with analysts, Northrop CEO Wes Bush made an obvious reference to North Korea: “Clearly, as we watch what’s happening around our globe, the rather rapid advance of some of our potential adversaries is quite concerning.”

Keep reading this article at: http://www.govexec.com/contracting/2017/09/us-defense-contractors-north-korean-hostilities-are-good-business/141146/

Filed Under: Government Contracting News Tagged With: budget, industrial base, industry

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