The US Federal Trade Commission (FTC) has approved Northrop Grumman’s proposed acquisition of global aerospace group and solid rocket motors (SRMs) supplier Orbital ATK for $7.8bn.
Northrop initially announced the deal in September, saying it would give the company greater access to lucrative government contracts while expanding its space rockets.
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The approval is part of a settlement resolving charges that Northrup’s planned acquisition of Orbital ATK likely would be anticompetitive.
As part of the settlement, Northrop is required to provide SRMs to its competitors on a non-discriminatory basis.
The company will also be required to separate the SRM business from the rest of its operations with a firewall.
The US Department of Defense will appoint a compliance officer to ensure Northrop adheres to the settlement.
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By GlobalDataAccording to the FTC complaint, Northrop’s planned acquisition of Orbital ATK would have reduced market competition for missile systems bought by the US Government, thereby leading to less innovation and higher prices for taxpayers.
The FTC also alleged that the acquisition would have violated federal law by reducing competition in the market as well as offer Northrup access to Orbital ATK’s proprietary information shared by missile contract competitors.
The FTC settlement will be subject to public comment until 5 July 2018, after which it will decide whether to modify or withdraw it.
Following completion, Orbital ATK will be renamed Northrop Grumman Innovation Systems.
