|
DOD backs Northrop
|
 |
October 23, 2001: 5:25 p.m. ET
Justice Dept. sues to block General Dynamics' bid for Newport News.
|
NEW YORK (CNNmoney) - The U.S. Department of Justice filed a lawsuit seeking to block General Dynamics Corp.'s bid for Newport News Shipbuilding Inc., citing competitive concerns for nuclear submarines.
The move paves the way for a competing bid by Northrop Grumman Corp.
Following a recommendation from the U.S. Department of Defense, the Justice Dept. said Tuesday a merger between General Dynamics and Newport would eliminate competition for nuclear subs and harm competition for other military ships.
Instead the Defense Dept. backed the Northrop Grumman bid. The Justice Dept. filed an antitrust lawsuit in U.S. District Court in Washington.
General Dynamics said it had "no statement at this time."
Northrop Grumman (NOC: Research, Estimates) said it was pleased with the Defense Dept.'s decision and did not expect any regulatory trouble with an acquisition.
Newport News (NNS: Research, Estimates) simply acknowledge it was advised of the government decision.
"This merger would give General Dynamics a permanent monopoly in nuclear submarines and would substantially lessen competition in surface combatants," said Charles A. James, assistant attorney general in charge of antitrust matters, in a statement.
General Dynamics (GD: Research, Estimates) was set to acquire Newport for about $2.1 billion, but earlier this month Newport announced it was opening talks with Northrop Grumman, a competing bidder, with what could prove to be a higher offer. 
|
|
|
|
|
 |
|
