FILED BY NORTHROP GRUMMAN
CORPORATION PURSUANT TO RULE 425
UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE
14D-2 OF THE SECURITIES EXCHANGE
ACT OF 1934
SUBJECT COMPANY: NEWPORT NEWS
SHIPBUILDING INC. COMMISSION FILE
NO.: 1-12385
NORTHROP GRUMMAN CORPORATION
Public Information
1840 Century Park East
Los Angeles, California 90067-2199
Telephone: 310-553-6262
Fax: 310-556-4561
Northrop Grumman Contacts: Frank Moore (Media) (310) 201-3335
Gaston Kent (Investors) (310) 201-3423
Newport News Contacts: Jerri Fuller Dickseski (Media) (757) 380-2341
Joe Fernandes (Investors) (757) 688-6400
For Immediate Release
NORTHROP GRUMMAN, NEWPORT NEWS SHIPBUILDING
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ANNOUNCE DEFINITIVE MERGER AGREEMENT
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Transaction Creates World-Class Shipbuilding Enterprise
LOS ANGELES -- Nov. 8, 2001 -- Northrop Grumman Corporation (NYSE:
NOC) and Newport News Shipbuilding Inc. (NYSE: NNS) announced today that
they have signed a definitive agreement under which Northrop Grumman will
acquire Newport News Shipbuilding.
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.
Northrop Grumman expects to promptly amend its existing offer documents in
order to reflect the merger agreement.
Following the completion of the exchange offer, Northrop Grumman will
consummate a second-step merger in which all of the remaining Newport News
Shipbuilding shareholders will have the same right to elect to receive cash
or shares of Northrop Grumman stock as described above.
"We are very pleased with our strategic acquisition of Newport News,"
said Kent Kresa, Northrop Grumman chairman and chief executive officer.
"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. Newport News' long and distinguished history and
reputation for innovation and excellence in shipbuilding are highly
regarded worldwide. We look forward to welcoming the 17,800 Newport News
employees to the growing Northrop Grumman family."
"Northrop Grumman is an outstanding corporation and this merger will
enhance the future of Newport News Shipbuilding, its employees and our
ability to serve our primary customer, the U.S. Navy," said William Fricks,
Newport News chairman and chief executive officer.
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.
Thomas Schievelbein, currently Newport News' executive vice president and
chief operating officer, will become president of the Newport News
operating sector. He will also serve on Northrop Grumman's corporate policy
council. Mr. Fricks has announced his intention to retire once the
transaction has been finalized.
"I salute Bill for his significant contributions and leadership during
his 35-year career at Newport News," said Mr. Kresa. "Looking to the
future, Tom's solid background and proven track record will enhance our
superior management team as we work together to maximize our competitive
advantages, respond to our customers' needs, and enhance shareholder
value," Mr. Kresa added.
The acquisition is valued at approximately $2.6 billion, which
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.
Citigroup's Salomon Smith Barney acts as principal strategic advisor
to Northrop Grumman and represented the company in the transaction. JP
Morgan Chase also provided financial advice. Newport News Shipbuilding was
advised by Credit Suisse First Boston.
Northrop Grumman Corporation is a $15 billion, global aerospace and
defense company with its worldwide headquarters in Los Angeles. Northrop
Grumman provides technologically advanced, innovative products, services
and solutions in defense and commercial electronics, systems integration,
information technology and non-nuclear shipbuilding and systems. With
80,000 employees and operations in 44 states and 25 countries, Northrop
Grumman serves U.S. and international military, government and commercial
customers.
Newport News Shipbuilding designs and constructs nuclear powered
aircraft carriers and submarines for the U.S. Navy and provides lifecycle
services for ships in the Navy fleet. The company employs about 17,800
people, and has revenues of approximately $2 billion.
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION
OF AN OFFER TO SELL SHARES OF NEWPORT NEWS SHIPBUILDING. THE AMENDED
EXCHANGE OFFER STATEMENT (INCLUDING THE PROSPECTUS, THE RELATED LETTER OF
ELECTION AND TRANSMITTAL AND OTHER DOCUMENTS) TO BE FILED BY NORTHROP
GRUMMAN WITH THE SEC AND THE AMENDED SOLICITATION/RECOMMENDATION STATEMENT
TO BE FILED BY NEWPORT NEWS SHIPBUILDING WITH THE SEC WILL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE NORTHROP GRUMMAN OFFER. THE EXCHANGE OFFER
STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL BE MADE
AVAILABLE TO ALL SHAREHOLDERS OF NEWPORT NEWS SHIPBUILDING, AT NO EXPENSE
TO THEM. THE EXCHANGE OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION
STATEMENT WILL ALSO BE AVAILABLE AT NO CHARGE AT THE SEC'S WEBSITE AT
WWW.SEC.GOV.
Note: Certain statements and assumptions in this release contain or are
based on "forward-looking" information (that each of the companies believe
to be within the definition in the Private Securities Litigation Reform Act
of 1995) and involve risks and uncertainties. Such "forward-looking"
information includes the statements above as to the impact of the proposed
acquisition on revenues. Such statements are subject to numerous
assumptions and uncertainties, many of which are outside the companies'
control. These include each of the companies' ability to successfully
integrate the operations of Newport News, assumptions with respect to
future revenues, expected program performance, and the outcome of
contingencies. The companies' operations are subject to various additional
risks and uncertainties resulting from its position as a supplier, either
directly or as subcontractor or team member, to the U.S. Government and its
agencies as well as to foreign governments and agencies; actual outcomes
are dependent upon factors, including, without limitation, each of the
companies' successful performance of internal plans; government customers'
budgetary restraints; customer changes in short-range and long-range plans;
domestic and international competition in both the defense and commercial
areas; product performance; continued development and acceptance of new
products; performance issues with key suppliers and subcontractors;
government import and export policies; acquisition or termination of
government contracts; the outcome of political and legal processes; legal,
financial, and governmental risks related to international transactions and
global needs for military aircraft, military and civilian electronic
systems and support and information technology; as well as other economic,
political and technological risks and uncertainties and other risk factors
set out in each of the companies' filings from time to time with the
Securities and Exchange Commission, including, without limitation, each of
the companies' reports on Form 10-K and Form 10-Q.