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Harris and L3 to divest Harris’s night vision business to proceed with merger

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Christian Fernsby ▼ | June 21, 2019
Harris Corporation
Acquisition   Harris Corporation

The Department of Justice announced that it is requiring Harris Corporation and L3 Technologies to divest Harris’s night vision business in order to proceed with their merger.

The Department further said that, without the divestiture, the proposed acquisition would eliminate competition between the only two suppliers of U.S. military-grade image intensifier tubes, which are the key component in night vision devices such as goggles and weapon sights purchased by the Department of Defense (DoD) for the United States military.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger.

At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.

According to the Department’s complaint, Harris and L3 are the only suppliers of U.S. military-grade image intensifier tubes for night vision devices such as goggles and weapon sights that are purchased by the DoD.

Image intensifier tubes are the critical component in these devices, which amplify visible light to increase situational awareness, threat detection, and mission performance of American soldiers and aircrews operating in low-light environments.

The Department’s complaint alleges that competition between Harris and L3 has resulted in lower prices, higher quality, and shorter delivery times and has fostered innovation that has led to the development of image intensifier tubes with higher sensitivity and resolution.

According to the complaint, the combination of Harris and L3 would leave the DoD without a competitive alternative for this critical input and likely result in higher prices, less favorable contract terms, and reduced research and development efforts.

Under the terms of the proposed settlement, Harris and L3 must divest Harris’s entire night vision business, including its manufacturing facility in Roanoke, Virginia, to an acquirer approved by the United States.

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