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The European Commission Friday approved Northrop Grumman Corp.’s $5.1 billion buyout of Litton Industries Inc. without requiring any modifications to the deal. The merger, which was announced in December, unites two of the United States’ largest defense contractors. The U.S. Department of Defense last year awarded the two companies top-level contracts worth a total of $5.8 billion. That would make the combined company the nation’s fourth-largest defense contractor. Yet the merger will not harm competition in Europe, the EC said in a brief statement. Los Angeles-based Northrop Grumman is primarily an aerospace contractor, while Woodland Hills, Calif.-based Litton is a shipbuilder. “To a large extent, the businesses of Northrop and Litton are complementary and the overlaps between their activities are very limited,” the EC said. The decision is not surprising because Europeans tend to buy ships from government-subsidized builders, said Paul Nisbet, a defense analyst with JSA Research in Newport, R.I. That practice cuts Litton out of the European market entirely, he said. The decision also comes only a week before a deadline for the Department of Justice to approve the deal or open a full antitrust investigation. Under the Hart-Scott-Rodino Act, the DOJ has until March 29 to decide whether to act on the deal. Northrop can extend the transaction by resubmitting notice to regulators — the company did just that in February. Northrop also extended the tender offer for Litton’s shares by one week to March 29. The company has been extending that deadline since February. Copyright (c)2001 TDD, LLC. All rights reserved.

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