Newport News to Acquire Avondale

Newport News Shipbuilding Inc., the largest maker of nuclear aircraft carriers, agreed to buy Avondale Industries Inc. for about $470 million in stock, a deal that would create a company capable of designing, building and maintaining the entire Navy fleet. The new company would have annual revenue of about $2.6 billion and nearly 24,000 employees. The proposed acquisition would cut the number of U.S. military shipbuilders to three and is the latest in a string of mergers in the defense industry involving companies making planes, missiles and electronics. Newport News’ rival General Dynamics Corp. bought Nassco Holdings Inc. in October, one of a few acquisitions that expanded its line of ships to resupply vessels. The transaction, approved by the boards of both companies, would give shareholders in Avondale, La.-based Avondale 1.196 shares of Newport News stock for each share of Avondale stock. Newport News, based in Newport News, Va., would also assume about $48.7 million in debt in the deal, which is expected to close in the second quarter. Shares of Avondale closed at $27.13, up 25 cents, while Newport News closed down 19 cents at $29.69, both on the New York Stock Exchange. The merger was announced after the close of trading.