Northrop Grumman Completes Tender Offer for Litton Industries Inc.; Acquisition Creates $15 Billion Top-Tier Global Defense Enterprise

Apr 03, 2001, 01:00 ET from Northrop Grumman Corporation

    LOS ANGELES, April 3 /PRNewswire/ -- Northrop Grumman Corporation
 (NYSE:   NOC) announced today that it has completed the purchase of all tendered
 shares of Litton Industries Inc. common and Series B preferred stock, after
 receiving all required U.S. and international governmental and regulatory
 approvals.
     "Today marks an exciting new chapter in Northrop Grumman's 60-year
 history," said Kent Kresa, Northrop Grumman's chairman, president and chief
 executive officer.  "The Litton acquisition creates a $15 billion, top-tier
 global defense enterprise with 80,000 employees worldwide.  Without question,
 the global military environment has changed.  So, too, has Northrop Grumman,"
 Mr. Kresa added.  "With Litton, we have solidified our position in major
 growth segments of the 21st century defense marketplace."
     Mr. Kresa said Litton is a superb strategic fit that offers tremendous
 synergies with existing Northrop Grumman businesses.  "Together, we form an
 extraordinary team of men and women who share a proud history of achievement
 and the promise of future accomplishments," he noted.
     "Litton elevates Northrop Grumman to a defense electronics powerhouse and
 one of the largest providers of information technology for the federal
 government," Mr. Kresa said.  "It also gives us the new prime capability of
 shipbuilding, making us the largest supplier of non-nuclear surface ships for
 the U.S. Navy.  Litton also adds world-class capabilities in the commercial
 electronics arena."
     Northrop Grumman said with continued strong growth from existing
 businesses and the Litton acquisition, the company's revenues are expected to
 double to $15 billion in 2001 and to $18 billion in 2003.  The company also
 expects double-digit increases in its economic earnings (excluding pension
 income, amortization of goodwill and other purchased intangibles) through
 2003.
     Mr. Kresa said he was particularly pleased that Northrop Grumman closed
 the transaction a few days after the end of the first quarter, meeting the
 goal set when the acquisition was announced on Dec. 21, 2000.  The integration
 of Litton's businesses into Northrop Grumman will begin immediately and should
 be completed by the end of this year.
     The company received early termination notice for the acquisition on March
 30, 2001, from the Federal Trade Commission under the Hart-Scott-Rodino Act.
 Previously, the European Commission approved the transaction on March 23,
 2001.  The tender offer for Litton's common and preferred stock expired April
 2, 2001, at midnight E.D.T.
     To welcome Litton employees to Northrop Grumman, Mr. Kresa is touring
 Litton's facilities, beginning today in Pascagoula, Miss., home of the Ingalls
 shipyard.  On the trip, he will also visit the Avondale shipyard in New
 Orleans, La.; meet with employees of PRC and TASC in the Washington, D.C.,
 area; address employees of Interconnect Technologies in Springfield, Mo.; and
 welcome employees of three defense electronics divisions based in the Los
 Angeles area.
     Under a definitive agreement signed by the two companies, the value of the
 Litton acquisition is approximately $5.1 billion, which includes the
 assumption of Litton's $1.3 billion in net debt.
     Northrop Grumman has been advised by the depository, Equiserve Trust Co.,
 NA, that as of midnight E.D.T. on April 2, 2001, in excess of 90 percent of
 the outstanding shares of Litton Industries common stock and in excess of
 50 percent of the shares of Series B preferred stock had been validly
 tendered, including tender by guarantees of delivery.
     The company said it will move promptly to complete the acquisition of the
 remaining shares of Litton's common stock pursuant to the merger agreement
 signed Jan. 23, 2001.  Following the acquisition, those shares of Litton not
 tendered under the tender offer will be converted into the right to receive
 $80 per share in cash.  Litton's Series B preferred shares will not be
 affected in the merger.
     Northrop Grumman Corporation is a $15 billion, global aerospace and
 defense company with its worldwide headquarters in Los Angeles.  Northrop
 Grumman provides technologically advanced, innovative products, services and
 solutions in defense and commercial electronics, systems integration,
 information technology and non-nuclear shipbuilding and systems.  With
 80,000 employees and operations in 44 states and 25 countries, Northrop
 Grumman serves U.S. and international military, government and commercial
 customers.
 
     Note:  Certain statements and assumptions in this release contain or are
 based on "forward-looking" information  and involve risks and uncertainties.
 Such "forward-looking" information includes the statements above as to the
 impact of the Litton acquisition on revenues and earnings.  Such statements
 are subject to numerous assumptions and uncertainties, many of which are
 outside the company's control.  These include the company's ability to
 successfully integrate the operations of Litton, assumptions with respect to
 future revenues, expected program performance and cash flows, the outcome of
 contingencies including litigation, environmental remediation, divestitures of
 businesses, and anticipated costs of capital investments.  The company's
 operations are subject to various additional risks and uncertainties resulting
 from its position as a supplier, either directly or as subcontractor or team
 member, to the U.S. Government and its agencies as well as to foreign
 governments and agencies; actual outcomes are dependent upon factors,
 including, without limitation, the company's successful performance of
 internal plans; government customers' budgetary restraints; customer changes
 in short-range and long-range plans; domestic and international competition in
 both the defense and commercial areas; product performance; continued
 development and acceptance of new products; performance issues with key
 suppliers and subcontractors; government import and export policies;
 acquisition or termination of government contracts; the outcome of political
 and legal processes; legal, financial, and governmental risks related to
 international transactions and global needs for military aircraft, military
 and civilian electronic systems and support and information technology; as
 well as other economic, political and technological risks and uncertainties
 and other risk factors set out in the company's filings from time to time with
 the Securities and Exchange Commission, including, without limitation, the
 company's reports on Form 10-K and Form 10-Q.
 
 

SOURCE Northrop Grumman Corporation
    LOS ANGELES, April 3 /PRNewswire/ -- Northrop Grumman Corporation
 (NYSE:   NOC) announced today that it has completed the purchase of all tendered
 shares of Litton Industries Inc. common and Series B preferred stock, after
 receiving all required U.S. and international governmental and regulatory
 approvals.
     "Today marks an exciting new chapter in Northrop Grumman's 60-year
 history," said Kent Kresa, Northrop Grumman's chairman, president and chief
 executive officer.  "The Litton acquisition creates a $15 billion, top-tier
 global defense enterprise with 80,000 employees worldwide.  Without question,
 the global military environment has changed.  So, too, has Northrop Grumman,"
 Mr. Kresa added.  "With Litton, we have solidified our position in major
 growth segments of the 21st century defense marketplace."
     Mr. Kresa said Litton is a superb strategic fit that offers tremendous
 synergies with existing Northrop Grumman businesses.  "Together, we form an
 extraordinary team of men and women who share a proud history of achievement
 and the promise of future accomplishments," he noted.
     "Litton elevates Northrop Grumman to a defense electronics powerhouse and
 one of the largest providers of information technology for the federal
 government," Mr. Kresa said.  "It also gives us the new prime capability of
 shipbuilding, making us the largest supplier of non-nuclear surface ships for
 the U.S. Navy.  Litton also adds world-class capabilities in the commercial
 electronics arena."
     Northrop Grumman said with continued strong growth from existing
 businesses and the Litton acquisition, the company's revenues are expected to
 double to $15 billion in 2001 and to $18 billion in 2003.  The company also
 expects double-digit increases in its economic earnings (excluding pension
 income, amortization of goodwill and other purchased intangibles) through
 2003.
     Mr. Kresa said he was particularly pleased that Northrop Grumman closed
 the transaction a few days after the end of the first quarter, meeting the
 goal set when the acquisition was announced on Dec. 21, 2000.  The integration
 of Litton's businesses into Northrop Grumman will begin immediately and should
 be completed by the end of this year.
     The company received early termination notice for the acquisition on March
 30, 2001, from the Federal Trade Commission under the Hart-Scott-Rodino Act.
 Previously, the European Commission approved the transaction on March 23,
 2001.  The tender offer for Litton's common and preferred stock expired April
 2, 2001, at midnight E.D.T.
     To welcome Litton employees to Northrop Grumman, Mr. Kresa is touring
 Litton's facilities, beginning today in Pascagoula, Miss., home of the Ingalls
 shipyard.  On the trip, he will also visit the Avondale shipyard in New
 Orleans, La.; meet with employees of PRC and TASC in the Washington, D.C.,
 area; address employees of Interconnect Technologies in Springfield, Mo.; and
 welcome employees of three defense electronics divisions based in the Los
 Angeles area.
     Under a definitive agreement signed by the two companies, the value of the
 Litton acquisition is approximately $5.1 billion, which includes the
 assumption of Litton's $1.3 billion in net debt.
     Northrop Grumman has been advised by the depository, Equiserve Trust Co.,
 NA, that as of midnight E.D.T. on April 2, 2001, in excess of 90 percent of
 the outstanding shares of Litton Industries common stock and in excess of
 50 percent of the shares of Series B preferred stock had been validly
 tendered, including tender by guarantees of delivery.
     The company said it will move promptly to complete the acquisition of the
 remaining shares of Litton's common stock pursuant to the merger agreement
 signed Jan. 23, 2001.  Following the acquisition, those shares of Litton not
 tendered under the tender offer will be converted into the right to receive
 $80 per share in cash.  Litton's Series B preferred shares will not be
 affected in the merger.
     Northrop Grumman Corporation is a $15 billion, global aerospace and
 defense company with its worldwide headquarters in Los Angeles.  Northrop
 Grumman provides technologically advanced, innovative products, services and
 solutions in defense and commercial electronics, systems integration,
 information technology and non-nuclear shipbuilding and systems.  With
 80,000 employees and operations in 44 states and 25 countries, Northrop
 Grumman serves U.S. and international military, government and commercial
 customers.
 
     Note:  Certain statements and assumptions in this release contain or are
 based on "forward-looking" information  and involve risks and uncertainties.
 Such "forward-looking" information includes the statements above as to the
 impact of the Litton acquisition on revenues and earnings.  Such statements
 are subject to numerous assumptions and uncertainties, many of which are
 outside the company's control.  These include the company's ability to
 successfully integrate the operations of Litton, assumptions with respect to
 future revenues, expected program performance and cash flows, the outcome of
 contingencies including litigation, environmental remediation, divestitures of
 businesses, and anticipated costs of capital investments.  The company's
 operations are subject to various additional risks and uncertainties resulting
 from its position as a supplier, either directly or as subcontractor or team
 member, to the U.S. Government and its agencies as well as to foreign
 governments and agencies; actual outcomes are dependent upon factors,
 including, without limitation, the company's successful performance of
 internal plans; government customers' budgetary restraints; customer changes
 in short-range and long-range plans; domestic and international competition in
 both the defense and commercial areas; product performance; continued
 development and acceptance of new products; performance issues with key
 suppliers and subcontractors; government import and export policies;
 acquisition or termination of government contracts; the outcome of political
 and legal processes; legal, financial, and governmental risks related to
 international transactions and global needs for military aircraft, military
 and civilian electronic systems and support and information technology; as
 well as other economic, political and technological risks and uncertainties
 and other risk factors set out in the company's filings from time to time with
 the Securities and Exchange Commission, including, without limitation, the
 company's reports on Form 10-K and Form 10-Q.
 
 SOURCE  Northrop Grumman Corporation