This New Year's Baby Is a Big One

This New Year's Baby Is a Big One<@VM>Techtoon

Steve LeSueur

By Steve LeSueur, Editor

There soon could be another behemoth in the federal information technology market. Northrop Grumman Corp.'s plan to purchase Litton Industries Inc. will create a projected $15 billion company that will challenge the top-tier companies for defense and civilian agency IT contracts.

The first reaction among financial analysts has been bullish. Paul Nisbet at JSA Research, for example, suggests that Northrop Grumman, by acquiring Avondale Industries and Ingalls Shipbuilding, will be better positioned to compete for the sophisticated information systems now deployed on Navy ships.

Among the major IT pieces are Northrop Grumman's wholly owned subsidiary Logicon Inc., and Litton's information systems group, which includes Litton PRC and Litton TASC. If the acquisition is approved, it will be interesting to see how the information technology units fit together and whether any extraneous pieces are sold.

Staff Writer Patience Wait talked to analysts and representatives from both companies to get their initial takes on the deal. Northrop Grumman expects to conclude the transaction within three months. Stay tuned.

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