Newport News Shipbuilding Incorporated has agreed to a takeover worth $2.1 billion by Northrop Grumman Corporation.
The boards of directors of both companies approved the terms of the transaction on Thursday, in which the Los Angeles-based conglomerate will acquire all the outstanding shares of Newport News. Northrop Grumman will also assume $500 million of Newport News debt.
Northrop Grumman also owns Ingalls shipyard in Pascagoula and the New Orleans-area Avondale shipyard.
Sen. Trent Lott said the deal is good news for Ingalls shipyard.
"Northrup Gruman has a broad long reputation in avionics and working with the military and airplanes, and now they've become a 500-pound gorilla with shipyards, too, because we have Avondale and Ingalls and now joining Newport News," Sen. Lott said. "Now I guess that would bring close to 30,000 people building ships in America working for Northrup Grumann, and we'll be a part of that team."
The announcement came a day after Newport News' board met to discuss the deal and adjourned without making any public statement about what had taken place. Northrop Grumman's board had already approved the deal. Newport News shareholders can now decide whether to receive $67.50 per share or Northrop Grumman common stock equivalent to $67.50 per share.
The merger will create a combined company with a work force of about 97,000. Northrop Grumman spokesman Randy Belote says although some job cuts are expected, officials don't anticipate any significant layoffs.