FALLS CHURCH, Va. (AP) -- Northrop Grumman is buying Orbital ATK for about $7.8 billion as activity in defense sector heats up amid rising global tensions.
Earlier this month, United Technologies said it would pay $22.75 billion for defense contractor Rockwell Collins.
Orbital ATK shareholders will receive $134.50 per share a 22 percent premium to the company's Friday closing price of $110.04. The deal's total value is approximately $9.2 billion, including debt.
Shares of Orbital ATK surged more than 20 percent in Monday premarket trading.
Northrop Grumman Corp. said that after the deal closes Orbital ATK Inc. will become a separate sector within its business operations.
The boards of both companies have approved the deal and it's expected to close in the first half of next year.