General Dynamics to Acquire Newport News for $2.1 Billion
Under the terms of the deal, defense contractor General Dynamics will pay $67.50 for each Newport News share outstanding, which is a 23% premium over the stock's Tuesday closing price of $55.05. General Dynamics will also assume about $500 million of the company's debt. The companies expect to close the transaction in the third quarter, providing regulators approve the deal.
Shares of Newport News lately gained $7.95, or 14.4%, to $63, and earlier reached a 52-week high of $63.40 on the New York Stock Exchange. General Dynamics recently dipped $1.81, or 2.4%, to $72.30."Combining our companies will provide our customers with significant cost savings to support the nation's need to build more nuclear ships," Newport News Chief Executive William Fricks said in a jointly prepared statement. Newport News, which has been the only builder of the Navy's aircraft carriers for the past 40 years, is one of only two U.S. companies capable of building nuclear subs. Separately, Newport News reported first-quarter earnings of $24 million, or 75 cents a share, easily exceeding Wall Street's expectations of 64 cents. The company earned $21 million, or 63 cents a share, in the same quarter a year ago. The company also raised its 2001 earnings forecast, excluding costs associated with the proposed merger.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV