Northrop Grumman Corporation and Newport News Shipbuilding Inc. have announced that they have signed a definitive agreement under which Northrop Grumman will acquire Newport News Shipbuilding for approximately$2.6 billion.
The boards of directors of both companies approved the terms of the transaction in which Northrop Grumman 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, subject to certain limitations and proration procedures.
Following the completion of the exchange offer, Northrop Grumman will consummate a second-step merger in which all of the remaining Newport NewsShipbuilding shareholders will have the same right to elect to receive cash or shares of Northrop Grumman stock.
Following the close of the transaction, Newport News will initially be operated as a Northrop Grumman sector. Longer term, Northrop Grumman plans to combine its two shipbuilding businesses into one operating sector.
The acquisition includes the assumption of approximately $500 million of Newport News Shipbuilding debt. The exchange offer, subject to the tendering of a majority of the outstanding Newport News Shipbuilding shares, is expected to close by the end of November.