NORTHROP-LITTON DEAL PASSES HURDLE.

Byline: Evan Pondel Staff Writer

Northrop Grumman Corp. was one step closer Friday to purchasing rival defense contractor Litton Industries Inc., after the European Commission approved the acquisition.

``It is a positive step that the European Commmission recognized there is very little overlap between our two businesses,'' said Bob Bishop, spokesman for Northrop Grumman.

Los Angeles-based Northrop, maker of the B-2 bomber and J-Stars airborne-surveillance plane, is waiting for U.S. regulators to approve the deal within the review period, which expires Thursday at midnight.

Northrop agreed in December to acquire Litton, a prime contractor in the shipbuilding sector, for $3.8 billion in cash. The aerospace giant will also assume $1.3 billion in Litton debt.

Davis Spencer, spokesman for Woodland Hills-based Litton, would not comment on the transaction.

Once U.S. regulators approve the deal, Litton will initially operate as a subsidiary of Northrop, Bishop said.

While no layoffs have been formally announced by either company, some of the combined companies' 79,000 employees will lose their jobs.

``The only layoffs that have been discussed are at Litton's corporate headquarters,'' Bishop said.

Northrop on Thursday extended its tender offer to Litton to March 29. Litton has about 45.8 million common shares outstanding.

As of Friday's close on the New York Stock Exchange, Litton finished the session up 0.19 at 79.64, while Northrop declined 0.70 to 85.58.