Trump Spurs Defense Firms to Go on Offense
The merger of Harris and L3 is the latest in a wave of deals aimed at capturing more of an expanding military budget.
Targeting takeovers.
Photographer: Andrew Harrer/Bloomberg
Attention M&A watchers: The flood gates for defense-related mergers are officially open.
Harris Corp. announced a plan on Sunday to merge with L3 Technologies Inc. in an all-stock deal that values the latter at more than $19 billion, including debt.1 The transaction boosts total announced deal volume for U.S. aerospace and defense companies since President Donald Trump's 2016 election to more than $80 billion. That's nearly as much as M&A activity as happened in the sector during the entirety of President Barack Obama's eight-year tenure. While the Obama administration worried too much consolidation would crimp innovation, Harris and L3 are wagering Trump will buy their argument that scale is necessary to make the investments the administration is trying to incentivize with an expanding military budget.