Together at last

Kent Kresa

Northrop Grumman Corp. and TRW Inc. agreed to merge and will create a high-tech heavyweight with more than $7 billion in annual IT revenue.

The merger, valued at $7.8 billion, will create the second largest U.S. defense contractor with overall revenue of more than $26 billion and about 123,000 employees.

The acquisition adds the "last critical node of space to our robust and well-diversified defense platform and systems capabilities that operate on the ground, at sea and in the air," said Kent Kresa, chairman and chief executive of Los Angeles-based Northrop Grumman.

Northrop Grumman is acquiring Cleveland-based TRW for $60 per share, almost 28 percent higher than Northrop's original offer of $47 per share, which TRW rejected from the outset as too low.

After the merger is complete, Northrop Grumman plans to separate TRW's automotive business, either through a sale or a spin-off, to shareholders.

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