NORTHROP GRUMMAN MATCHES OFFER FOR NEWPORT NEWS SHIPBUILDING

NORTHROP GRUMMAN MATCHES OFFER FOR NEWPORT NEWS SHIPBUILDING    Northrop Grumman Corp. said Wednesday it has offered to acquire Newport News Shipbuilding, matching a $2.6-billion offer extended by General Dynamics Corp. on April 25.
   Los Angeles-based Northrop Grumman's board of directors authorized management to mach General Dynamic's offer of $67.50 per share for the outstanding shares of Newport News stock, payable 75 percent in Northrop Grumman stock and the remainder in chase. The deal would include assumption of about $500 million in debt for the shipyard, which designs and builds nuclear-powered vessels for the U.S. Navy and provides service for the Navy fleet.
   In announcing the offer, Northrop Grumman voiced concerned that a Newport News-General Dynamics deal would create an unhealthy monopoly, resulting in an unacceptable and anticompetitive consolidation of the U.S. shipbuilding industry.
   Kent Kresa, chairman, president and chief executive officer of Northrop Grumman, said the “proposed transaction with General Dynamics raises serious antitrust issues” and, that if permitted to proceed, “would leave the nation vulnerable with only one nuclear capable submarine and ship building.”
   Kresa noted a 1999 U.S. Defense Department analysis that indicated that more than 75 percent of the total shipyard engineering talent and more than 95 percent of the Navy's research and development investment would be combined in a General Dynamics-Newport News entity.
   In a letter to William P. Fricks, chairman and CEO of Newport News, Kresa said a deal with Northrop Grumman would offer a variety of strategic benefits, including significant cost savings to the U.S. Navy and the opportunity for Newport News to employees to become part of a larger, more diversified company.
   “In contrast to General Dynamics' offer, the product portfolios of Northrop Grumman and Newport News in no way overlap, provide opportunities for efficiencies, and the combination of two companies would preserve the competitive landscape of the military shipbuilding industry,” Kresa wrote to Fricks.
   Newport News, which employees about 17,200 people and has revenues of about $2 billion a year, advised its shareholders to wait for its board's recommendations on Northrop Grumman's offer.