Lockheed, Northrop Granted Reprieve

The government gave Lockheed Martin Corp. and Northrop Grumman Corp. until Monday to overcome objections to their $8.3 billion merger or face a federal lawsuit to block the deal.

“We have given everybody concerned some more time to try to address the issues,” Attorney General Janet Reno told her weekly news conference Thursday. “And I expect that this will happen within the next several days.”

Reno would not predict whether the extra time would produce agreement on divestitures that would satisfy the government’s objections. But asked if the government would sue if the matter is not worked out within the new time frame, Reno replied: “That’s correct.”

Lockheed said in a statement that the Justice Department had given it until Monday to respond to the government’s demand for divestitures of key defense businesses, including the production of radar systems and electronic countermeasures, which enable pilots to evade incoming missiles.

Lockheed said it also was prepared to go to court, but would continue to negotiate. Earlier, Lockheed had said it had “outlined new initiatives” to address government objections.