Defense contractor Harris announced on Friday it was planning to buy Exelis for close to $4.4 billion. Analysts immediately commented that this surprise move could lead to more consolidation among mid-size U.S. defense firms.

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Of note, the deal pushes Harris up into the top 10 Pentagon suppliers, with a total annual revenue of $8.2 billion. The Harris and Exelis mashup will manufacture a variety of radios, sensors and space hardware, as well as commercial air-traffic-control systems.

More on the Harris – Exelis deal

The Harris offer consists of $23.75 a share in cash and stock. This is a 34% premium over Exelis’ closing price Thursday, a price most analysts seem to think is reasonable. Harris shares rose more than 7% to $74.75 in pre-open trade, while Exelis was 35.5% higher at $24.

Exelis owners will receive about $16.63 in cash for each share, and the rest of the $23,75 in Harris stock. The deal has an enterprise value of $4.75 billion, according a statement from the companies.

Assuming the passes due diligence and regulatory approval, Harris shareholders will own around 85% of the combined firm. Harris says it hopes to finalize the acquisition this summer, and believes the deal will be slightly accretive to earnings in the first full year with more benefits in years two and three after closing.

The statement also noted that Harris expects pretax cost synergies in the neighborhood of $100 million to $120 million, with savings coming from consolidating the headquarters of the firms and the elimination of other duplicative operational costs.

The defense contractor was spun out of ITT in early 2011 and then its lower-margin services business in 2014 a move seen by analysts as getting ready for a takeover.

Comment from Harris CEO

Bill Brown, the CEO of Harris, waxed enthusiastic about the proposed deal, calling it “transformational,” and providing scale for the firm when the defense-spending outlook is finally beginning improve.