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The competition cools? ATK is splitting off its aerospace division to merge that division with Orbital Sciences.
Alliant Techsystems Inc. ATK on Tuesday said it plans to split into two independent companies, one focused on outdoor sports and hunting products, the other centered on aerospace and defense. The outdoor sports operations–which produce commercial ammunition, hunting products and other related items–will be spun off to Alliant shareholders in a tax-free transaction, the company said. The segment generated $2.2 billion in revenue during 2013, Alliant said.
After the separation, Alliant said it plans to merge the aerospace and defense business–which produces rocket propulsion systems and satellite systems, among other things–with rocket and space-system developer Orbital Sciences Inc. The company will be named Orbital ATK Inc.
More here. The company press releases call this “a merger of equals” and do not make it clear what instigated the deal. Did Orbital offer to buy ATK’s aerospace division with its ammo business spun off, or did ATK want to sell off its aerospace division to focus on ammo? I wonder. The ammo business right now is booming, while aerospace remains a much more risky venture. ATK might have wanted to focus on ammo, where the money is, and proposed the idea to Orbital.