Aerospace technology developer Harris Corporation and security, communication and aviation specialist L3 Technologies have agreed to a merger of equals, following a unanimous decision from the boards of both companies. L3 shareholders will receive a fixed exchange ratio of 1.30 shares of Harris common stock for each share of L3 common stock. Upon completion of the merger, Harris shareholders will own approximately 54% and L3 shareholders will own approximately 46% of the combined company on a fully diluted basis. The combined company, L3 Harris Technologies will be the sixth largest defense company in the USA and a top 10 defense company globally, with approximately 48,000 employees and customers in more than 100 countries. For 2018, the combined company is expected to generate net revenue of approximately US$16bn and earnings before interest and tax (EBIT) of US$2.4bn. William M Brown, chairman, president and CEO, Harris, said, This transaction extends our position as a premier global defense technology company that unlocks additional growth opportunities and generates value for our customers, employees and shareholders. Combining our complementary franchises and extensive technology portfolios will enable us to accelerate innovation to better serve our customers, deliver significant operating synergies and produce strong free cash flow, which we will deploy to drive shareholder value. Integration planning is already underway, and from our extensive experience with integration, we are confident in our ability to realize US$500m of annual gross cost synergies and US$3bn of free cash flow by the third year. Christopher E Kubasik, chairman, president and CEO, L3, said, This merger creates greater benefits and growth opportunities than either company could have achieved alone. L3 Harris Technologies will possess a wealth of technologies and a talented and engaged workforce. By unleashing this potential, we will strengthen our core franchises, expand into new and adjacent markets and enhance our global presence. Both L3 and Harris are technology driven organizations with significant R&D investment and a combined workforce of approximately 22,500 engineers and scientists. For the meteorological sector, Harris produces cutting-edge imager and sounder instrumentation, the likes of which have been used on all National Oceanic and Atmospheric Administration (NOAA) Polar-orbiting Operational Environmental Satellites since 1978 and all of NOAAs Geostationary Operational Environmental Satellites (GOES) since 1994. As well as weather monitoring hardware, the company also produces the accompanying software to help process and disseminate the weather data. L3 Essco, a subsidiary of L3 Technologies, specializes in the design and manufacture of radar and protective radomes, including C-band and S-band radars for weather detection applications. Once merged, L3 Harris Technologies will be headquartered in Melbourne, Florida, and will be led by a combined board of 12 members, with six directors from each company. Brown will serve as chairman and CEO, and Kubasik will serve as vice chairman, president and chief operating officer for the first two years following the transaction. For the third year, Brown will transition to executive chairman and Kubasik to chairman and CEO. The merger is expected to close in mid-calendar year 2019, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company. Photo: William M Brown, chairman, president and CEO, Harris
Helen has worked for UKi Media & Events for more than a decade. She joined the company as assistant editor on Passenger Terminal World and has since progressed to become editor of five publications, covering everything from aviation, logistics and automotive to meteorology. She has a love for travel and property and has redeveloped three houses in three years. When she’s not editing magazines, she’s running around after her two boys and their partner in crime, Pete the pug.