General Dynamics to Acquire Newport News Shipbuilding

Apr 25, 2001, 01:00 ET from General Dynamics

    FALLS CHURCH, Va., April 25 /PRNewswire/ -- General Dynamics (NYSE:   GD)
 announced today that it has signed a definitive agreement to acquire
 Newport News Shipbuilding (NYSE:   NNS).  The acquisition, approved by the
 boards of directors of both companies, is to be accomplished through a cash
 tender offer for all of Newport News Shipbuilding's publicly held outstanding
 shares at a price of $67.50 per share.  The transaction is valued at
 approximately $2.6 billion, which includes the assumption of approximately
 $500 million of Newport News Shipbuilding debt.  The tender offer will begin
 within seven business days.  The acquisition, subject to the tendering of a
 majority of the Newport News Shipbuilding shares as well as regulatory review,
 is expected to close in the third quarter of 2001.
     Following the completion of the tender offer and necessary approvals,
 General Dynamics intends to consummate a second-step merger in which all of
 the remaining Newport News Shipbuilding shareholders receive the same price
 paid in the tender offer.
     "Newport News is a solid, well-run company with sustainable revenues and
 earnings and strong cash flow.  Our offer reflects its inherent worth, offers
 Newport News shareholders an attractive premium, and provides a wonderful
 opportunity to save significant amounts of money for the U.S. Navy while
 retaining both nuclear shipyards," said Nicholas D. Chabraja, General Dynamics
 chairman and CEO.
     William P. Fricks, chairman and CEO of Newport News Shipbuilding, said,
 "This acquisition will provide Newport News shareholders an attractive price,
 and our employees will benefit from being part of a larger, more diverse
 company.  It will enhance job security, and provide more career choices in a
 wider enterprise.  Today, Newport News is the nation's sole supplier of
 aircraft carriers, and we're teamed with Electric Boat on the Navy's only new
 submarine program.  Combining our companies will provide our customers with
 significant cost savings to support the nation's need to build more nuclear
 ships."
     Chabraja and Fricks will meet with financial analysts and investors to
 discuss the acquisition on Wednesday, April 25, at 9:00 a.m. EDT at the New
 York Palace Hotel, 455 Madison Avenue, NY, NY.  The conference will be
 simulcast on the World Wide Web at www.generaldynamics.com , and at
 www.nns.com ; a rebroadcast of the conference will be on those websites by
 1:00 p.m. EDT.  A replay of the conference will also be available at 1:00 p.m.
 by calling 877-519-4471 (domestic) or 973-341-3080 (international); the
 passcode is 2555408.
 
     Newport News Shipbuilding, headquartered in Newport News, Virginia,
 designs and constructs nuclear-powered aircraft carriers and submarines for
 the U.S. Navy and provides life-cycle services for ships in the Navy fleet.
 The company employs approximately 17,000 employees and had 2000 revenues of
 $2.07 billion, and net income of $90 million.  More information about the
 company can be found at www.nns.com .
 
     General Dynamics, headquartered in Falls Church, Virginia, employs
 approximately 46,000 people worldwide and anticipates 2001 sales of
 approximately $11.5 billion.  The company has leading market positions in
 business aviation, information systems, shipbuilding and marine systems, and
 land and amphibious combat systems.  More information about the company can be
 found on the World Wide Web at www.generaldynamics.com .
 
     Any "forward-looking statements" contained in this press release are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Words such as "expects," "anticipates," "plans,"
 "believes," "scheduled," "estimates," variations of these words and similar
 expressions are intended to identify forward-looking statements which include
 but are not limited to projections of revenues, earnings, segment performance,
 production and deliveries, cash flows, contract awards and backlog stability.
 These statements are not guarantees of future performance and involve certain
 risks and uncertainties, which are difficult to predict.  Therefore, actual
 future results and trends may differ materially from what is forecast in
 forward-looking statements due to a variety of factors, including, without
 limitation:  the company's successful execution of internal performance plans;
 changing priorities or reductions in the U.S. government defense budget;
 termination of government contracts due to unilateral government action;
 changing customer demand or preferences; changes from the company's
 expectations with respect to its customers' exercise of business aircraft
 options; performance issues with key suppliers and subcontractors; the status
 or outcome of legal and/or regulatory proceedings; the status or outcome of
 labor negotiations; and the timing and occurrence (or non-occurrence) of
 circumstances beyond the company's control.
     This announcement is neither an offer to purchase nor a solicitation of an
 offer to sell shares of Newport News Shipbuilding.  At the time the offer is
 commenced, General Dynamics will file a Tender Offer Statement with the SEC
 and Newport News will file a Solicitation/Recommendation Statement with
 respect to the offer.
     The Tender Offer Statement (including an offer to purchase, a related
 letter of transmittal and other offer documents) and the
 Solicitation/Recommendation Statement will contain important information that
 should be read carefully before any decision is made with respect to the
 offer.
     The offer to purchase, the related letter of transmittal and certain other
 documents, as well as the Solicitation/Recommendation Statement, will be made
 available to all shareholders of Newport News, at no expense to them.  The
 Tender Offer statement (including the offer to purchase, the related letter of
 transmittal and all other offer documents filed with the SEC) and the
 Solicitation/Recommendation Statement will also be available at no charge at
 the SEC's website at www.sec.gov .
 
 

SOURCE General Dynamics
    FALLS CHURCH, Va., April 25 /PRNewswire/ -- General Dynamics (NYSE:   GD)
 announced today that it has signed a definitive agreement to acquire
 Newport News Shipbuilding (NYSE:   NNS).  The acquisition, approved by the
 boards of directors of both companies, is to be accomplished through a cash
 tender offer for all of Newport News Shipbuilding's publicly held outstanding
 shares at a price of $67.50 per share.  The transaction is valued at
 approximately $2.6 billion, which includes the assumption of approximately
 $500 million of Newport News Shipbuilding debt.  The tender offer will begin
 within seven business days.  The acquisition, subject to the tendering of a
 majority of the Newport News Shipbuilding shares as well as regulatory review,
 is expected to close in the third quarter of 2001.
     Following the completion of the tender offer and necessary approvals,
 General Dynamics intends to consummate a second-step merger in which all of
 the remaining Newport News Shipbuilding shareholders receive the same price
 paid in the tender offer.
     "Newport News is a solid, well-run company with sustainable revenues and
 earnings and strong cash flow.  Our offer reflects its inherent worth, offers
 Newport News shareholders an attractive premium, and provides a wonderful
 opportunity to save significant amounts of money for the U.S. Navy while
 retaining both nuclear shipyards," said Nicholas D. Chabraja, General Dynamics
 chairman and CEO.
     William P. Fricks, chairman and CEO of Newport News Shipbuilding, said,
 "This acquisition will provide Newport News shareholders an attractive price,
 and our employees will benefit from being part of a larger, more diverse
 company.  It will enhance job security, and provide more career choices in a
 wider enterprise.  Today, Newport News is the nation's sole supplier of
 aircraft carriers, and we're teamed with Electric Boat on the Navy's only new
 submarine program.  Combining our companies will provide our customers with
 significant cost savings to support the nation's need to build more nuclear
 ships."
     Chabraja and Fricks will meet with financial analysts and investors to
 discuss the acquisition on Wednesday, April 25, at 9:00 a.m. EDT at the New
 York Palace Hotel, 455 Madison Avenue, NY, NY.  The conference will be
 simulcast on the World Wide Web at www.generaldynamics.com , and at
 www.nns.com ; a rebroadcast of the conference will be on those websites by
 1:00 p.m. EDT.  A replay of the conference will also be available at 1:00 p.m.
 by calling 877-519-4471 (domestic) or 973-341-3080 (international); the
 passcode is 2555408.
 
     Newport News Shipbuilding, headquartered in Newport News, Virginia,
 designs and constructs nuclear-powered aircraft carriers and submarines for
 the U.S. Navy and provides life-cycle services for ships in the Navy fleet.
 The company employs approximately 17,000 employees and had 2000 revenues of
 $2.07 billion, and net income of $90 million.  More information about the
 company can be found at www.nns.com .
 
     General Dynamics, headquartered in Falls Church, Virginia, employs
 approximately 46,000 people worldwide and anticipates 2001 sales of
 approximately $11.5 billion.  The company has leading market positions in
 business aviation, information systems, shipbuilding and marine systems, and
 land and amphibious combat systems.  More information about the company can be
 found on the World Wide Web at www.generaldynamics.com .
 
     Any "forward-looking statements" contained in this press release are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  Words such as "expects," "anticipates," "plans,"
 "believes," "scheduled," "estimates," variations of these words and similar
 expressions are intended to identify forward-looking statements which include
 but are not limited to projections of revenues, earnings, segment performance,
 production and deliveries, cash flows, contract awards and backlog stability.
 These statements are not guarantees of future performance and involve certain
 risks and uncertainties, which are difficult to predict.  Therefore, actual
 future results and trends may differ materially from what is forecast in
 forward-looking statements due to a variety of factors, including, without
 limitation:  the company's successful execution of internal performance plans;
 changing priorities or reductions in the U.S. government defense budget;
 termination of government contracts due to unilateral government action;
 changing customer demand or preferences; changes from the company's
 expectations with respect to its customers' exercise of business aircraft
 options; performance issues with key suppliers and subcontractors; the status
 or outcome of legal and/or regulatory proceedings; the status or outcome of
 labor negotiations; and the timing and occurrence (or non-occurrence) of
 circumstances beyond the company's control.
     This announcement is neither an offer to purchase nor a solicitation of an
 offer to sell shares of Newport News Shipbuilding.  At the time the offer is
 commenced, General Dynamics will file a Tender Offer Statement with the SEC
 and Newport News will file a Solicitation/Recommendation Statement with
 respect to the offer.
     The Tender Offer Statement (including an offer to purchase, a related
 letter of transmittal and other offer documents) and the
 Solicitation/Recommendation Statement will contain important information that
 should be read carefully before any decision is made with respect to the
 offer.
     The offer to purchase, the related letter of transmittal and certain other
 documents, as well as the Solicitation/Recommendation Statement, will be made
 available to all shareholders of Newport News, at no expense to them.  The
 Tender Offer statement (including the offer to purchase, the related letter of
 transmittal and all other offer documents filed with the SEC) and the
 Solicitation/Recommendation Statement will also be available at no charge at
 the SEC's website at www.sec.gov .
 
 SOURCE  General Dynamics