Harris Corporation and L3 Technologies Agree to Merge, Forming a Military Technology Company

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Harris Corporation and L3 Technologies Agree to Merge, Forming a Military Technology Company

The merge of Harris Corporation and L3 Technologies was announced on 14th October 2018. The all stock merger of equals has resulted in the creation of a military technology company that would be focused on the development of mission critical and differentiated solutions for customers across the globe. Post completion of the merger, the shareholders of L3 would own approximately 46 percent while Harris Corporation shareholders would own approximately 54 percent of the newly formed company on a completely diluted basis.

The combined company would be called L3 Harris Technologies and would rank sixth amongst the largest defense company in the United States and a top ten defense company on a global level. With customers in over 200 nations and approximately 48000 employees, the company is expected to generate a revenue of 16 billion dollars. Apart from this, the company is expected to generate a free-cash flow of 1.9 billion dollars and an EBIT of 2.4 billion dollars.

William M. Brown, the chairman, president, and CEO of Harris, said that this deal would extend their position as a global defense technology firm which uncovers further growth opportunities and generates value for the customers, shareholders, and employees of Harris. He further added that the combination of extensive technology portfolios and complementary franchises would enable them to accelerate innovation for delivering significant operating synergies and produce free cash flow, for serving their customers, which they would deploy to drive shareholder value.

According to William, integration planning is already ongoing and from their extensive experience in integration, they are confident about their ability to realize 500 million dollars of annual gross cost synergies and free cash flow of three billion dollars by the year 3.

Christopher E. Kubasik, chairman, president and CEO of L3 said that this combination creates major benefits and opportunities of growth than either of the two companies could have achieved alone. The two companies being on same growth trajectories, this merger would accelerate the process of becoming a more integrated, agile and innovative sixth non-traditional Prime focus by investment in significant, next-generation technologies. He further added that L3 Harris Technologies would possess a wealth of technologies and an engaged and talented employess. By unleashing and boosting this potential, they would enhance their presence across the globe, expand into adjacent and new markets, and strengthen their core franchises, he concluded.

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