Shareholders of high-tech and defense giants Harris Corp. and L3 Technologies Inc. on Thursday overwhelmingly approved the merger of the two companies at their respective special meetings.
The combined company — to be called L3 Harris Technologies Inc. — will be based in Melbourne.
Harris is among Brevard County’s largest employers, with about 6,800 local employees.
L3 has a facility on Woody Burke Drive in Melbourne, just around the corner from Harris’ headquarters, where about 100 employees develop modems for military communications networks.
The proposed “merger of equals” of Melbourne-based Harris and New York-based L3 was first announced in October. The merger is expected to close in mid-2019, subject to satisfaction of various closing conditions, including receipt of regulatory approvals.
Harris spokesman Jim Burke said among the entities that must give their approval to the merger are the U.S. Department of Justice and the European Union. The U.S. Department of Defense also will review the deal.
With a stock deal valued at $33.5 billion — based on the stock prices when the deal was announced — it’s expected to be the largest merger in defense industry history. L3 Harris Technologies will be the nation’s sixth-largest defense contractor.
L3 Harris Technologies also will become the eighth-largest company based in Florida, according to current Fortune 500 rankings.
“I am pleased that our shareholders voted in favor of this strategic combination, which will create a premier global defense technology company,” William Brown, Harris chairman, president and chief executive officer, said in a prepared 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.”
Christopher Kubasik, L3’s chairman, chief executive officer and president, called the shareholder votes “a key milestone in our merger process.”
“Overall, integration planning is proceeding well, as we prepare to capture operational synergies and establish a shared culture of innovation,” Kubasik said. “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.”
“The combined company will be headquartered in Brevard, and the merger is expected to strengthen its strong presence here,” Burke said. “Upon close, the company will be the largest aerospace and defense company headquartered in Florida.”
Here are the vote totals for Harris shareholders: Stockholders owning 102.08 million shares voted in favor of the merger; stockholders owning 376,000 shares voted against; and stockholders owning 152,172 shares abstained.
Here are the vote totals for L3 shareholders: Stockholders owning 64.53 million shares voted in favor of the merger; stockholders owning 1.94 million shares voted against; and stockholders owning 307,532 shares abstained.
Harris has about 17,500 employees worldwide. The company supports government and commercial customers in more than 100 countries and has about $6 billion in annual revenue. The company is organized into three business segments: communication systems; electronic systems; and space and intelligence systems.
L3 Technologies, with about 31,000 employees worldwide, develops advanced defense technologies and commercial solutions in pilot training, aviation security, night vision and electro-optical and infrared sensor systems, weapons, maritime systems and space. L3 is organized into three business segments: intelligence, surveillance and reconnaissance systems; communications and networked systems; and electronic systems. The company reported 2018 sales of $10.2 billion.
About 57 percent of the combined company’s revenue would come from the U.S. military, including 26 percent from the Air Force, 13 percent from the Navy, 10 percent from the Army and 8 percent from other Department of Defense entities. The other 43 percent would come from a combination of other U.S. government agencies (13 percent), foreign governments (17 percent) and commercial customers (13 percent).
The combined company’s board of directors will have 12 members, with six directors from each company, including Brown and Kubasik. In the meantime, Brown and Kubasik will be co-chairs of a joint integration team to work out details of bringing the two companies together.
Under terms of the merger, L3 shareholders will receive 1.3 shares of Harris common stock for each share of L3 common stock they own. Upon completion of the merger, Harris shareholders will own about 54 percent and L3 shareholders will own about 46 percent of the combined company.
Harris stock closed Thursday at $162.31, up $2.31 from Wednesday’s close, in New York Stock Exchange trading. L3 closed Thursday at $210.02, up $3.42 from Wednesday’s close, in New York Stock Exchange trading.