The purchase is expected to close in the first half of 2018 barring any regulatory hurdles.
"The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth. Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains," Northrop Grumman CEO Wes Bush said.
Northrop Grumman plans to integrate Orbital as the company's fourth business sector. The company expects the purchase to be accretive to earnings per share and free cash flow within the first full year.
Orbital shares were up 20% to $132.60 in early trading Monday.
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