DOJ BLOCKS GENERAL DYNAMICSÆ BID FOR NEWPORT NEWS SHIPBUILDING
The U.S. Justice Department filed an antitrust lawsuit against General Dynamics this week to block a proposed acquisition of Newport News Shipbuilding.
DOJ said if the merger was allowed to proceed, it would eliminate competition for nuclear submarines, resulting in a monopoly.
The Defense Department coordinated with the Justice Department in the investigation that resulted in the lawsuit, and advised the department that it had significant competitive concerns with the transaction.
“Our armed forces need the most innovative and highest quality products to protect our country,” said Charles A. James, assistant attorney general in charge of the DOJ’s Antitrust Division. “This merger-to-monopoly would reduce innovation and, ultimately, the quality of the products supplied to the military, while raising prices o the U.S. military and to U.S. taxpayers.”
General Dynamics, in a cash tender offer, planned to buy a controlling share of Newport News for about $2.6 billion. The two companies are the only manufacturers of nuclear submarines and the two of only three companies to build ships of any kind of the Navy.
Newport News, a Delaware corporation based in Newport News, Va., reported 2001 revenues of about $2.1 billion. The shipbuilder is also the sole supplier of nuclear aircraft carriers to the Navy.