Northrop Grumman enters $500M ASR agreement

Northrop Grumman announced that it has entered into an accelerated share repurchase, or ASR, agreement with Bank of America to repurchase $500M of Northrop Grumman’s common stock. The ASR is in addition to previously planned repurchases, including open market share repurchases. The company continues to target returning more than 100% of its free cash flow to shareholders through dividends and share repurchases in 2023. Under the ASR agreement, Northrop Grumman expects to receive an initial delivery of approximately 0.9M shares on February 6, representing approximately 80% of the expected share repurchases under the ASR agreement, based on the company’s closing price of $440.86 on February 2. The final number of shares to be repurchased through the ASR will be based on Northrop Grumman’s volume-weighted average price during the term of the transaction, less a discount, and is expected to be completed no later than the second quarter of 2023. The ASR will be completed under the company’s current share repurchase authorization, which currently has approximately $2.5B remaining.