L3Harris Technologies announced the signing of a definitive agreement under which Leidos will acquire L3Harris’ airport security and automation business for $1 billion in cash.

The transaction is expected to close in mid-2020 and is conditioned on customary closing conditions, including receipt of regulatory approvals.

“Today’s announcement represents a significant milestone in L3Harris’ strategic priority to reshape our portfolio following last year’s L3 and Harris merger,” said William M. Brown, Chairman and CEO, L3Harris.

“The agreement provides a stable path forward for the Security & Detection Systems and MacDonald Humfrey Automation businesses, while enabling L3Harris to focus its resources on core technologies,” he added.

Proceeds from the divestiture are expected to be used to repurchase shares and offset dilution.

With annual revenues of approximately $500 million, L3Harris’ Security & Detection Systems and MacDonald Humfrey Automation solutions are used by the aviation and transportation industries, regulatory and customs authorities, government and law enforcement agencies, and commercial and other high-security facilities.

L3Harris Technologies is an agile global aerospace and defense technology innovator, delivering end-to-end solutions that meet customers’ mission-critical needs. The company provides advanced defense and commercial technologies across air, land, sea, space and cyber domains.

L3Harris has approximately $18 billion in annual revenue and 50,000 employees, with customers in 130 countries. 

Leidos is a Fortune 500® information technology, engineering, and science solutions and services leader working to solve the world’s toughest challenges in the defense, intelligence, homeland security, civil, and health markets. The company’s 36,000 employees support vital missions for government and commercial customers.

Headquartered in Reston, Virginia., Leidos reported annual revenues of approximately $10 billion for the fiscal year ended December 28, 2018.