Northrop Grumman to buy missile-maker Orbital for $7.8bn

US defence contractor Northrop Grumman said on Monday it would buy Orbital ATK for about $7.8 billion, getting access to lucrative government contracts and expanding its arsenal of missile defence systems and space rockets.

The all-cash deal comes as North Korea tests threatening missiles and nuclear weapons, heightening tensions with the United States and its allies.

"Clearly, as we watch what's happening around our globe, the rather rapid advance of some of our potential adversaries is quite concerning," Northrop chief executive Wes Bush said on a call with analysts.

Although Northrop already has a significant presence in payloads, it has not had launcher capability, an area that Orbital brings for both space and missile defence, Vertical Research Partners analyst Robert Stallard said on Monday.

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Orbital has contracts with Nasa and the US army. The company is one of the two firms hired by Nasa to fly cargo to the International Space Station under an initial contract worth up to $3.1 billion. – Bloomberg