• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Transportation

Cramer: Northrop-Orbital Deal Is Bigger Than Just the Synergies

This deal wouldn't have gone through a year ago.
By JIM CRAMER Sep 19, 2017 | 07:03 AM EDT
Stocks quotes in this article: OA, UTX, COL, HON, TMUS, T, TWX

We yawned yesterday when Northrop Grumman bid for Orbital ATK (OA) as if was good for Northrop but no more than that.

The synergies are pretty obvious. The possibilities for Northrop Grumman and the potential to bid on new contracts it didn't have could be enormous.

No wonder the stock went higher.

But the one thing that wasn't mentioned was antitrust. Nobody said "you know what, this makes it so there are fewer competitors that could bid and drive down the price of important military equipment." It would almost sound like Pollyanna goodie-two-shoes kind of talk if someone did. 

That's amazing, because a year ago, I don't think this deal would have gone through -- and if Hillary had won, I don't think the two companies would even entertain it. Not any more than United Technologies (UTX) would be able to buy Rockwell Collins (COL) to eliminate a potential competitor in some key portions of the airline business. 

Now, there's not been much done between the White House and Congress. It's been pretty rancorous, and the latest posturing -- the sitdown between the President and Nancy Pelosi and Chuck Schumer -- is still one more gambit that could sour things within the Republican party. The repeal and replace horror show waste of time, the border tax fiasco, these are all distractions from two parts of the agenda that we would have expected by now -- tax reform and repatriation.

But one thing is for certain, the Congress is doing nothing to stop deals that at another time wouldn't have been proposed because they would have been opposed by the Justice Department's antitrust division simply because of market power concentration. 

Ideally you want Northrop to compete with Orbital on contracts. Sure, they don't now, but why couldn't they if Northrop wanted that business so badly? You think that the government would want United Tech to own a huge part of the plane to the point where it can be too powerful a supplier and box out, say Honeywell (HON) ? The old government would find a reason because it hated big business. This government would bless anything, even the tie-ups between the health maintenance organizations and the aborted Baker Hughes-Halliburton deal.

I think that between here and year end, the notion that deals will get done without any repercussions or opposition from the Justice Department is going to be a hallmark of the stock market. Yesterday on Halftime with Scott Wapner, I was asked by my friend Pete Najarian why there was huge call volume in T-Mobile (TMUS) stock. The answer? Because anyone in the industry could buy them and I think it would be allowed. Why not? This Justice Department has shown no resistance whatsoever, no more than it is showing to the ATT (T) -Time Warner (TWX) deal, even as the President said he wanted to block it. Remember that campaign promise?

Yes, there may not be big legislative changes. But when it comes to deregulation and corporate America, the changes are real. And they are spectacular if you are a bull looking for ideas. 

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Regulation | Markets | Transportation | Telecom Services | Mergers and Acquisitions | Politics | Stocks

More from Transportation

Old Dominion Freight Line Is Ready to Roll Again

Bruce Kamich
Jun 28, 2022 11:15 AM EDT

Here's what traders could do now.

Southwest Airlines Upgraded But the Charts Didn't Get the Memo

Bruce Kamich
Jun 23, 2022 1:35 PM EDT

Let's take a look.

Will FedEx Deliver? Checking the Charts Ahead of Earnings

Bruce Kamich
Jun 23, 2022 12:17 PM EDT

Here's our plan.

Winnebago's Numbers Were Awesome: Here's How to Go Along for the Ride

Stephen Guilfoyle
Jun 22, 2022 11:00 AM EDT

Here's my trading strategy for investors right now.

Why It Costs $1B Per Year to Go Up Against Indonesia's GoTo Group

Alex Frew McMillan
Jun 22, 2022 6:30 AM EDT

It's not often you find a tech stock with defensive characteristics and a strong upside, but GoTo offers both.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login