Northrop Grumman's new chief executive Ron Sugar believes there are no more major opportunities for consolidation in the US defence industry, providing military spending remains stable. The company, which is forecasting double-digit growth for the next few years, instead plans to focus on acquiring smaller companies with niche skills and appropriate divestment of smaller businesses.
In April Sugar took the helm of a company that has doubled in size through acquiring 16 companies, including Litton Industries, Newport News Shipbuilding and TRW. Northrop Grumman has annual revenues of $25 billion and 120,000 staff. He replaces Kent Kresa, who has retired.
"I don't expect to see any more significant consolidation here - perhaps outside the USA," says Sugar. One of the last major mergers, attempted by Lockheed Martin and Northrop Grumman, was ruled out by the US Department of Defense.
A major growth engine for the company's future sales is the missile defence sector, where Northrop Grumman is teamed with Raytheon to compete for the new Kinetic Energy Interceptor programme against Boeing and Lockheed Martin.
Source: Flight International
