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Newport-Avondale deal cleared
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February 22, 1999: 2:04 p.m. ET
Justice Department OKs deal, but General Dynamics bid still on the table
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NEW YORK (CNNfn) - Newport News Shipbuilding and Avondale Industries got the green light from the Justice Department Monday, laying the groundwork for their $470 million shipbuilding merger.
The deal, which would create a shipbuilding company with $2.6 billion in annual revenue, still requires approval from the shareholders of both companies, as well as consent from the Maritime Administration of the Department of Transportation.
The clearance comes on the heels of a $2 billion unsolicited takeover bid for Newport News (NNS) by General Dynamics (GD) last week. That bid is still on the table and analysts say it will be considered only if the proposal is first approved by the Department of Defense.
If DOD approves, then Newport News shareholders will consider the General Dynamics bid before voting on the Avondale deal.
New Orleans-based Avondale manufactures aircraft carriers and submarines for the U.S. Navy.
Shares of Avondale (AVDL) jumped 5/8 to 30-3/8 on the New York Stock Exchange Monday afternoon, while Newport News shed 7/8 to 31-1/16 on the Nasdaq. 
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