NORTHROP Grumman Corp., Newport News Shipbuilding announce $2.1 billion merger agreement

Thursday, November 8th 2001, 12:00 am
By: News On 6

NORFOLK, Va. (AP) _ Newport News Shipbuilding Inc. has agreed to a $2.1 billion takeover by Northrop Grumman Corp., the companies announced Thursday.

The boards of directors of both companies approved the terms of the transaction, in which the Los Angeles-based conglomerate will acquire all the outstanding shares of Newport News.

In an exchange offer, Newport News Shipbuilding's shareholders may elect to receive either $67.50 per share in cash or a number of shares of Northrop Grumman common stock designed to provide a value of $67.50.

Northrop also will assume of $500 million of Newport News debt, the companies said.

``We are very pleased with our strategic acquisition of Newport News,'' Kent Kresa, Northrop Grumman chairman and chief executive officer, said in a statement. ``With Newport News, we are creating a $4 billion world-class, fully capable shipbuilding enterprise with expertise in every class of nuclear and non-nuclear naval vessel.''

William Fricks, Newport News chairman and chief executive officer, said the merger will ``enhance the future of Newport News Shipbuilding, its employees and our ability to serve our primary customer, the U.S. Navy.''

Asked about job cuts, Northrop Grumman spokesman Randy Belote said, ``We don't anticipate significant layoffs. There will be some obvious corporate headquarter redundancies.'' He declined to give specifics.

Newport News Shipbuilding spokeswoman Jennifer Dunn did not immediately return a telephone call seeking comment.