Newport News Takeover Far From Being Finalized

The U.S. Defense Department wants more data from rivals for the $2.1 billion takeover of Newport News Shipbuilding Inc. and may still be weeks or months away from recommending which offer if either to allow, a top Pentagon official said on Wednesday.

General Dynamics Corp. and Northrop Grumman Corp. said last week that they had agreed with the departments of defense and justice to delay any effort to close their competing bids until at least August 20.

Under U.S. anti-trust law, the Justice Department has 10 business days to reach a final decision on a proposed all-cash acquisition after the would-be acquirer turns over all merger-related information sought by regulators.

"They have not reached that point yet," Edward "Pete" Aldridge, the under secretary of defense for acquisition, told reporters at the Pentagon. "And we are continuing to ask for more information."

Newport News designs and builds nuclear-powered aircraft carriers and submarines for the U.S. Navy and provides maintenance for U.S. warships.

The Pentagon is reviewing the takeover proposals to gauge their impact on the defense industrial base and U.S. national security with an eye to making sure the Navy will be able to go on getting a "quality product at a fair price," he said.

"It's still uncertain as to when all that will occur," he added, referring to completion of the Pentagon review. "It could be weeks away, it could be months away."

Norine Lyons, a spokeswoman at General Dynamics headquarters in Falls Church, Va., said the company was "standing by, ready to provide" more information if requested by the authorities. A spokesman for Los Angeles-based Northrop, Randy Belote, declined comment.

General Dynamics announced in April an all-cash offer to buy Newport News for $2.1 billion and the assumption of about $500 million in debt. Northrop's rival bid is for $67.50 in cash or stock.

Northrop contends the General Dynamics deal cannot sail under antitrust law because it would unite the only two U.S. makers of nuclear-powered submarines.

General Dynamics says there is really no competition among submarine builders anyway and that the Northrop deal could lead to a monopoly in large surface ship construction.