Harris, L3 merger receives shareholder go-ahead

Harris, L3 merger receives shareholder go-ahead

Harris Corp. and L3 Technologies Inc. shareholders on Thursday voted in favor of the proposed “merger of equals” announced last October. The combined, $36 billion company will be known as L3 Harris Technologies Inc. and will be the sixth largest defense company in the U.S., as well as a top 10 defense company globally.

“I am pleased that our shareholders voted in favor of this strategic combination, which will create a premier global defense technology company,” Harris Chairman, President and CEO William Brown said in a statement. “Today’s vote clearly supports our view that this merger will unlock additional growth opportunities and generate value for our customers, employees and shareholders.”

On Harris’ end, the proposal received 102.08 million votes in favor of the merger and 376,449 against. Some 152,172 abstained.

“This vote represents a key milestone in our merger process,” L3 Chairman, CEO and President Christopher Kubasik said. “Overall, integration planning is proceeding well as we prepare to capture operational synergies and establish a shared culture of innovation. The increased scale of L3 Harris will allow us to deliver comprehensive mission-critical solutions to our customers, while creating value for all of our stakeholders.”

In October, Brown said the company expects to realize $500 million of annual gross cost synergies and $3 billion of free cash flow by year three, which could be 2021 or 2022. Upon completion of the merger, Harris shareholders will own approximately 54 percent and L3 shareholders will own approximately 46 percent of the combined company on a fully diluted basis.

The company will be headquartered in Melbourne, Fla. Some 3,600 of Harris’ 17,000 staffers are employed at five locations in Rochester. L3, which develops advanced defense technologies and commercial solutions in pilot training, aviation security, night vision and more, has roughly 31,000 employees worldwide.

The merger is expected to close midyear 2019, subject to regulatory approvals.

Shares of Harris stock (NYSE: HRS) have climbed to $163.99 since Thursday’s announcement.

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