Over a year ago, I alerted our readers to the upcoming consolidation in sectors of the Defense Industry, resulting from Sequester. A prognosis that is unfolding even as I write this. Harris communications has just wrapped up a deal to acquire Exelis in a $4.75 billion cash + stock transaction. The deal will close in June of this year pending regulator and Exelis shareholder approval.

The new company will have more than $8 billion in revenue and about 23,000 employees globally, including 9,000 engineers and scientists.

“Acquiring Exelis is transformational for Harris,” said Harris CEO William Brown. “The combination of the two companies’ highly complementary core franchises creates a competitively stronger company with significantly greater scale.”

In our view, this is a match made in heaven for several reason. Most significant is their highly complementary core competencies. There is very little redundancy and that keeps restructuring costs to a minimum. I’m looking forward to some great products and technologies emerging from the combined organizations.

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