Lockheed Martin, Northrop Defend Deal

Lockheed Martin Corp. and Northrop Grumman Corp. defended their $12 billion combination, saying it would enhance defense industry competition by creating a company with the clout to take on larger rivals Boeing Co. and Raytheon Co.

In an 80-page court filing, the companies offered a point-by-point rebuttal to the U.S. Justice Department’s March 23 federal lawsuit that seeks to block the deal. Federal antitrust authorities assert Lockheed Martin’s purchase of Northrop would create monopolies or near-monopolies in at least nine defense-related markets, stifling innovation and pushing up costs.

Federal antitrust officials also allege combining Lockheed Martin’s aircraft experience with Northrop’s radar expertise would create an integrated company with power to eliminate outside suppliers, deny their products to rival buyers and prevent new entrants into various markets.

“The Justice Department has gerrymandered its market definitions to create competition between Lockheed Martin and Northrop Grumman where none exists, and to exclude their competitors where the merging parties do compete,” the companies’ court filing says.

Furthermore, the companies complain that the government’s case is based on outdated evidence no longer relevant in the still-shrinking defense industry.