Page 4: of Maritime Reporter Magazine (December 2001)

Northrop Grumman, NNS Agree To Merge

Northrop Grumman

Corporation and New- port News Shipbuilding

Inc. 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 outstand- ing shares of Newport News. In an exchange offer, Newport News Ship- building'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 cer-

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Northrop

Grumman expects to promptly amend its William Fricks, NNS chair-man and CEO will retire once

M

Thomas Schievelbein, will become president of NNS' operating sector. existing offer the transaction has been , „ . finalized, documents in order to reflect the merger agree- ment.

Following the comple- tion of the exchange offer,

Northrop

Grumman will consum- mate a sec- ond-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 strate- gic acquisition of Newport News," said

Kent Kresa, Northrop Grumman chair- man and CEO. "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 excel- lence in shipbuilding are highly regard- ed worldwide." "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 CEO. Fol- lowing the close of the transaction,

Newport News will initially be operated as a Northrop Grumman sector. Longer term, Northrop Grumman plans to com- bine its two shipbuilding businesses into one operating sector. Thomas

Schievelbein, currently Newport News' executive vice president and COO, will become president of the Newport News operating sector. He will also serve on

Northrop Grumman's corporate policy council. Fricks has announced his intention to retire once the transaction has been finalized. The acquisition is valued at approximately $2.6 billion, which includes the assumption of approximately $500 million of NNS debt. The exchange offer, subject to the tendering of a majority of the outstand- ing NNS shares, was expected to close by the end of November. 6 Maritime Reporter & Engineering News