11 June 2018 News

Aerospace company Orbital ATK bought by Northrop Grumman

An Antares rocket carrying a Cygnus spacecraft, developed by Orbital ATK to fly cargo to the International Space Station. Image: Northrop Grumman
An Antares rocket carrying a Cygnus spacecraft, developed by Orbital ATK to fly cargo to the International Space Station. Image: Northrop Grumman

Aerospace manufacturer Orbital ATK Inc who regularly fly cargo resupply missions to the International Space Station has been purchased by Northrop Grumman in a deal worth $9.2 billion.

The acquisition, which includes a $1.4 billion debt transfer, was announced by Northrop Grumman in September 2017 but was formally approved by the U.S Federal Trade Commission last week.

A number of conditions have been stipulated as part of the deal to ensure that competition in supplying rockets to the U.S defence department still remains. “By ensuring that other missile suppliers can continue to compete, the settlement preserves the procompetitive benefits of the transaction while addressing the potential anticompetitive harms,” a statement by the FTC said.

One such condition enforced by the FTC is that Northrop Grumman must make Orbital ATK-developed solid rocket motors available to other defence and aerospace contractors "on a non-discriminatory basis under specified circumstances.”

Although Norman Grumman has a long history in producing spacecraft, before its purchase of Orbital ATK the company was not seen as a leading player in the launch industry. The acquisition is therefore seen as a “complimentary fit” and not one that will reduce competition in the defence and space sectors said Northrop Grumman CEO Wes Bush.

“Northrop tends to focus on the larger systems that have a set of mission applications that is attendant with that class of platform, whereas Orbital ATK has demonstrated a very significant capability in the small and medium size, and I would say, more agile class of spacecraft,” said Bush.

Orbital ATK will now be named Northrop Grumman Innovation Systems and will become Northrop Grumman's fourth business sector along with its Aerospace Systems, Mission Systems and Technology Services. The new sector will be headed by Blake Larson who previously served as the chief operating officer of Orbital ATK.

“We are delighted to have them join the Northrop Grumman team, and we are very excited about the value creation our combination represents for our customers, shareholders and employees. Together, through our leading technologies and innovation-focused culture, we look forward to developing enhanced mission capabilities and more competitive offerings in critical global security domains,” said Bush.

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