Leidos Holdings, Inc. (NYSE:LDOS) entered into an agreement and plan of merger to acquire Information Systems & Global Solutions Business from Lockheed Martin Corporation (NYSE:LMT) in a reverse morris trust transaction for $4.1 billion on January 26, 2016. Leidos Holdings, Inc. will acquire QTC Management, Inc. as a part of this transaction. Under the terms of the agreement, Lockheed Martin will receive 77 million shares of Ledios common stock and a $1.8 billion one-time special cash payment to Lockheed Martin, which the Lockheed Martin intends to use to repay debt, pay dividends, and/or repurchase its stock. As a result, at the close of the merger, Lockheed shareholders and current Ledios stockholders will own 50.5% and 49.5%, respectively, of the common stock of Ledios. Ledios will pay a termination fee of $150 million if the transaction is terminated by Lockheed Martin due to a failure of Leidos to comply with certain obligations relating to, among other matters, obtaining stockholder approval and not soliciting or participating in alternative transactions, if Leidos or Lockheed Martin terminates the Merger Agreement for failure to close before the termination date of January 26, 2017. In addition, if the merger agreement is terminated because approval is not obtained at the Leidos stockholder meeting called for such purpose, Leidos has agreed to reimburse Lockheed Martin for its expenses up to a maximum amount of $37.5 million.

The transaction is subject to consummation of the seperation agreement, approval under the HSR, Act of 1976, approval of regulatory including court approvals in other jurisdictions, registration statement being effective and the approval by Leidos stockholders and listing of new shares. Deal has been approved by the Board of LMC and Leidos. As of March 29, 2016, waiting period under Hart-Scott-Rodino Act Waiting Period expired. As on July 13, 2016 Competition and Markets Authority approved the transaction. As on August 8, 2016, Leidos Holdings, Inc. shareholders approved the issuance of shares of Leidos common stock necessary to complete the transaction. Leidos Holdings Directors David G. Fubini, Miriam E. John, John P. Jumper, Harry M.J. Kraemer, Jr.Roger A. Krone, Gary S. May, Lawrence C. Nussdorf, Robert S. Shapard and Noel B. Williams were re-elected to the Board. The transaction is expected to close by the fourth quarter of 2016. As of July 11, 2016, the exchange offer commenced. The offer is expected to close on August 16, 2016. Simpson Thacher acted as legal advisor to JPMorgan. Robert B. Pincus, Steven Messina, Cliff Gross, Regina Olshan and Simon Baxter of Skadden, Arps, Slate, Meagher & Flom LLP and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisors and Citigroup Global Markets Inc. acted as financial and fairness opinion provider for Leidos. Neil Barr, Kathleen L. Ferrell, Nicole P. Field, Rachel Lerner, Aaron M. Weil, Samantha Jacoby, James A. Florack, Vanessa L. Jackson, Christopher Nairn and Brittany E. Buhler of Davis Polk & Wardwell LLP acted as legal advisors and Glenn C. Campbell of Hogan Lovells US LLP acted as legal advisors and Goldman, Sachs & Co., J.P. Morgan Securities LLC and Houlihan Lokey Capital, Inc. acted as financial advisors to Lockheed. Georgeson LLC acted as information agent in the deal.

Leidos Holdings, Inc. (NYSE:LDOS) completed the acquisition of Information Systems & Global Solutions Business from Lockheed Martin Corporation (NYSE:LMT) in a reverse morris trust transaction on August 16, 2016.