LITTON MAY RULE SEA; FIRM BIDS TO BE TOP MILITARY SHIPBUILDER.Byline: Gregory J. Wilcox and Ben Sullivan Daily News Staff Writers Litton Industries Named after inventor Charles Litton Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001. Inc. has made unsolicited bids totaling nearly $2 billion for two big shipbuilding companies, officials said late Thursday, in deals that would turn the Valley-based defense contractor Noun 1. defense contractor - a contractor concerned with the development and manufacture of systems of defense armed forces, armed services, military, military machine, war machine - the military forces of a nation; "their military is the largest in the region"; into the nation's preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae military ship contractor. Litton made a $1.25 billion bid for Newport News Newport News, independent city (1990 pop. 170,045), SE Va., on the Virginia peninsula, at the mouth of the James River, off Hampton Roads, near Norfolk; inc. 1896. Shipbuilding Inc. of Newport News, Va., and a $503.9 million offer for Avondale Industries Inc. of Avondale, La. Officials of both companies said they would consider the offers. If the deals are accepted, the combined company would have 58,000 employees and annual revenue of $7.4 billion. The huge proposed deals, revealed early Thursday evening, are surprising because Avondale had earlier agreed to be acquired by Newport News. Litton's offer comes only about two weeks after the Defense Department rejected General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. Corp.'s $1.4 billion unsolicited bid for Newport News Shipbuilding. Saying the potential cost savings did not justify the deal, Pentagon officials feared giving one company so much control over the nation's military ship contracts. Within minutes of the Defense Department announcement April 14, General Dynamics withdrew its offer. A proposed deal between Newport News and Avondale already has received antitrust clearance from the Department of Justice. Litton's offers, if accepted by the companies, would be subject to the same kind of review. Officials at Woodland Hills-based Litton, a Fortune 500 company with 34,900 employees nationwide, did not return messages for comment. But Michael R. Brown, chairman and chief executive of Litton, issued a printed statement late Thursday saying, ``When combined with our highly efficient Ingalls Shipbuilding Ingalls Shipbuilding is a shipyard located in Pascagoula, Mississippi, originally established in 1938, and is now part of Northrop Grumman Ship Systems. It is a leading producer of ships for the US Navy, and at 10,900 employees, the largest private employer in Mississippi. business, this triumvirate Triumvirate (trīŭm`vĭrĭt, –vĭrāt'), in ancient Rome, ruling board or commission of three men. Triumvirates were common in the Roman republic. would create a world-class leader in shipbuilding.'' The company made its offers in a letter dated May 5. The acquisition of Newport News Shipbuilding would be a tax-free, stock-for-stock merger in which each Newport News Shipbuilding common share would be converted into 0.55 Litton shares. Litton's deal for Avondale would be an all-cash transaction of $38 per common share. The offers are above Thursday's closing prices for both companies' shares. Executives at both Avondale and Newport News said they would evaluate the proposals. ``Our board is fully committed (Law) committed to prison for trial, in distinction from being detained for examination. See also: Fully to acting in the best interest of Newport News shareholders,'' said William P. Fricks, the company's chairman and chief executive officer. Newport's board authorized talks with Litton executives to evaluate the offer. Fricks said Newport's board has not determined whether the terms Litton is proposing are adequate. Analyst Paul Nisbet at JSA JSA - Japanese Standards Association. Research Inc. in Newport, R.I., said that while Litton's bids were unexpected, they make sense. ``You'd end up with two very powerful shipbuilders instead of one powerful one and one weak, which you now have.'' Litton is the weak one now, Nisbet said, but would gain a competitive advantage over General Dynamics, the nation's other major military shipbuilder, by pulling off these deals. A combined Litton-Avondale-Newport News could build nuclear submarines, aircraft carriers and noncombatant non·com·bat·ant n. 1. A member of the armed forces, such as a chaplain or surgeon, whose duties lie outside combat. 2. A civilian in wartime, especially one in a war zone. support ships, although General Dynamics still would have a lock on Navy destroyers. ``It evens the playing field. In fact, it tilts it a little in Litton's favor over General Dynamics,'' Nisbet said. Newport News Shipbuilding designs and constructs nuclear-powered aircraft carriers and submarines for the U.S. Navy and provides life-cycle maintenance services for ships in the Navy fleet. The company employs 18,000 people and has annual revenues of about $1.8 billion. Avondale is a major supplier of noncombat vessels to the Navy. Litton's Ingalls Shipbuilding division makes guided missile guided missile, self-propelled, unmanned space or air vehicle carrying an explosive warhead. Its path can be adjusted during flight, either by automatic self-contained controls or remote human control. destroyers. In February, Litton reported sales of $1.13 billion and earnings of $40.6 million for its most recent quarter. Litton's stock closed Thursday at $64.75, up 18.75 cents. |
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