Shares of L3Harris Technologies (LHX) - Get Report were higher after the aerospace and defense technology innovator agreed to sell its military-training division to Canadian rival CAE (CAE) - Get Report for $1.05 billion and its combat propulsion systems and related businesses to German industrial firm Renk AG for roughly $400 million.
Shares of the Melbourne, Fla., company at last check rose 1.9% to $185.33. The stock was off 3.8% in 2021 through the close of trading Friday.
The combined deal, expected to close in the second half, is valued at $1.45 billion, L3Harris said in a statement.
The transaction is subject to regulatory clearances.
“With today’s announcement, we have now completed or announced divestitures of businesses with a combined $1.4 billion of revenue for $2.5 billion in expected proceeds, and our portfolio-shaping process is ongoing,” L3Harris Chairman and Chief Executive William M. Brown said in a statement.
CAE, Saint-Laurent, Quebec, expects the deal to add to earnings per share and forecasts cost savings of roughly C$35 million to C$45 million a year in the second year after the closing, The Wall Street Journal reported.
CAE has a market value of around C$9.5 billion. It has historically specialized in flight simulators and training devices and has been broadening its reach through several deals in recent months, the Journal report added.
“These agreements place our Military Training and Combat Propulsion Systems and related businesses with well-suited buyers, while positioning L3Harris to further focus on its core technologies and execute its strategic priorities," Brown added.
L3Harris said it expected to use the proceeds to buy back shares.