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Northrop Grumman gets conditional US antitrust approval for Orbital ATK deal

Defense and global security contractor Northrop Grumman Corp. secured conditional approval from the U.S. Federal Trade Commission to acquire Orbital ATK Inc. for approximately $7.8 billion in cash and raised its outlook for full year 2018.

The FTC will require Northrop Grumman to supply solid rocket motors to competitors on a nondiscriminatory basis and to separate the operation of the SRM business from the other company operations with a firewall. The U.S. Department of Defense will appoint a compliance officer to oversee Northrop's conduct as part of the approval.

Northrop Grumman's agreement to acquire the aerospace and defense technologies specialist "would have reduced competition in the market for missile systems purchased by the U.S. government, resulting in less innovation and higher prices for taxpayers," according to the FTC.

Following the approval, Northrop Grumman said it expects to complete the transaction after market close June 6. Orbital ATK will become Northrop Grumman Innovation Systems.

Northrop Grumman updated its full-year guidance to target diluted EPS of $16.20 to $16.45, compared to the previous range of $15.40 to $15.65. The company anticipates annual sales of $30 billion in 2018, up from previous projections of $27 billion.