Features

Northrop Grumman probably done growing — for now

Staff
Wednesday July 03, 2002

LOS ANGELES — After nearly four years of acquisitions that propelled Northrop Grumman Corp. from an endangered company in 1998 to the nation’s second-largest defense contractor, the company may be done growing — at least for now. 

After four months of wrangling, Northrop on Monday announced its deal to buy TRW Inc. for $7.8 billion in stock. Northrop also will assume about $4 billion in TRW debt. 

Government regulators wounded Northrop 1998 when regulators rejected a proposed merger with Lockheed Martin Corp. Instead of breaking itself up, it regrouped and transformed itself from an aircraft company into a diversified defense giant, specializing in high-tech computer warfare and surveillance systems. 

With its purchase of Litton Industries in 2001 and last year’s acquisition of Newport News Shipbuilding, it also became the nation’s largest shipbuilder. 

“I think they are probably pretty satisfied with where they are at this point,” said Paul Nisbet, an analyst with JSA Research. “I would have said after the first shipbuilding company that they would rest for a while and they’ve done two or three things since.” 

With TRW, the company becomes a major maker of high-tech unmanned surveillance vehicles, spy satellites, computer software and other equipment central to America’s war on terrorism. 

The company, which will maintain its Los Angeles headquarters, now makes Global Hawk unmanned surveillance planes, which have been used in Afghanistan, as well as the kind of database management systems vital to linking information housed on the computers of various intelligence agencies.