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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: DECEMBER 14, 2001
DATE OF EARLIEST EVENT REPORTED: NOVEMBER 29, 2001
NORTHROP GRUMMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-16411 95-4840775
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(Address of principal executive offices)
(310) 553-6262
(Registrant's telephone number,
including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 23, 2001 Northrop Grumman Corporation, a Delaware corporation
("Northrop Grumman") commenced an exchange offer for all the outstanding
shares (including associated rights) of Newport News Shipbuilding Inc., a
Delaware corporation ("Newport News") for $67.50 in cash or $67.50 worth of
Northrop Grumman common stock. On November 7, 2001, Northrop Grumman,
Newport News and Purchaser Corp. I, a Delaware corporation and a wholly
owned subsidiary of Northrop Grumman (the "Purchaser") entered into an
Agreement and Plan of Merger (the "Merger Agreement").
Pursuant to the Merger Agreement, Northrop Grumman agreed to acquire
all of the outstanding common stock (including associated rights) of
Newport News through an offer to purchase or exchange (the "Offer")
followed by a merger (the "Merger") of Newport News with and into the
Purchaser, with the Purchaser as the surviving corporation. Pursuant to the
amended prospectus dated November 13, 2001 and comprising a part of
Northrop Grumman's Registration Statement on Form S-4 (Commission File
333-61506) as amended from time to time (the "Prospectus"), Northrop
Grumman, through the Purchaser, offered to purchase each outstanding share
of the Newport News common stock for either, at the election of the holder:
(i) $67.50 net per share, in cash, or (ii) shares of Northrop Grumman
common stock valued at $67.50 (the exchange ratio was fixed at .07193
shares of Northrop Grumman for each share of Newport News), subject in each
case to the proration procedures and limitations described in the
Prospectus. Pursuant to the Offer, Northrop Grumman will pay $633,452,178
in cash and issue 16,636,885 shares of Northrop Grumman common stock in the
offer and merger. The exact exchange ratio of 0.7193 was determined by
dividing $67.50 by the average of the closing sale prices for a share of
Northrop Grumman common stock on the New York Stock Exchange as reported in
The Wall Street Journal over the 5-day trading period beginning on November
20, 2001 and ending on November 27, 2001, which was $93.84.
The Offer expired at midnight New York City time on Thursday, November
29, 2001 and at approximately 12:30 a.m. New York City time on November 30,
2001, Northrop Grumman accepted for purchase or exchange 26,241,019 shares
of Newport News common stock (including associated rights), which
represents approximately 80.7% of the outstanding shares of Newport News
common stock, as of November 29, 2001. On December 13, 2001, Northrop
Grumman filed an information statement/prospectus as Post-Effective
Amendment No. 1 to Form S-4, which states that a shareholders' meeting will
be held on January 18, 2002 to complete the merger of Newport News with and
into the Purchaser.
The value of the Newport News acquisition is approximately $2.6
billion, which includes the assumption of Newport News' approximately $500
million in debt. The purchase price was based upon an analysis of the
perceived value of the ongoing business and the estimated net assets to be
acquired and took into account the liabilities reflected on the balance
sheet of Newport News and assumed by Northrop Grumman.
The Offer was not conditioned upon any financing arrangements.
Northrop Grumman expects to fund the cash portion of the Offer from working
capital and its currently available line of credit, which is a $2.5 billion
five year revolving credit, dated March 30, 2001, among Northrop Grumman
and Litton Industries, Inc., as borrowers, The Chase Manhattan Bank and
Credit Suisse First Boston, as co-administrative agents, The Chase
Manhattan Bank as payment agent, Salomon Smith Barney Inc., as syndication
agent, The Bank of Nova Scotia and Deutsche Banc Alex. Brown, Inc., as
co-documentation agents, and JP Morgan and Credit Suisse First Boston, as
joint lead arrangers and joint bookrunners, and the lender signatories
thereto.
Pursuant to the Merger Agreement, the acquisition of Newport News will
be completed through a second step merger in which Newport News will be
merged with and into the Purchaser and the remaining holders of common
shares of Newport News will receive the right to elect to receive for each
share of Newport News either $67.50 net in cash or 0.7193 shares of
Northrop Grumman common stock subject to the proration and limitations
procedures described in the information statement/prospectus.
Northrop Grumman will initially operate Newport News as a stand-alone
sector of the company. Over time, all shipbuilding operations will be
combined into one sector to take advantage of increased efficiencies in
procurement, information technology and operating systems. Northrop Grumman
does not intend to merge its various shipyards because of the vast
differences between nuclear and non-nuclear shipbuilding.
In the normal course of their businesses, Northrop Grumman and Newport
News are parties to transactions and agreements.
Pursuant to a retention bonus agreement with Mr. Schievelbein dated
November 7, 2001, Northrop Grumman and Mr. Schievelbein agreed that Mr.
Schievelbein will serve as corporate vice president and president of the
new Newport News sector. In general, under the terms of the retention bonus
agreement, Northrop Grumman assumed Mr. Schievelbien's change of control
employment agreement.
Except as described above or disclosed in the Prospectus, no known
material relationship exists between Newport News and Northrop Grumman or
any of its affiliates, directors or officers, or any associate of any such
directors or officers. The foregoing summary is qualified in its entirety
by the exhibits attached hereto, which are incorporated herein by this
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The following financial statements of Newport News are hereby
incorporated by reference into this report from the indicated report filed
with the Securities and Exchange Commission:
The following financial statements of Newport News are hereby
incorporated by reference from the Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, filed with the Securities and Exchange
Commission on March 26, 2001:
o Report of Independent Accountants;
o Consolidated Balance Sheets at December 31, 2000 and 1999;
o Consolidated Statements of Operations for the years ended
December 31, 2000, 1999 and 1998;
o Consolidated Statements of Stockholders' Investment for the years
ended December 31, 2000, 1999 and 1998; and
o Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998.
The following financial statements of Newport News are hereby
incorporated from the Quarterly Report on Form 10-Q for the nine months
ended September 16, 2001, filed with the Securities and Exchange Commission
on October 25, 2001:
o Consolidated Balance Sheets at September 16, 2001;
o Consolidated Statements of Operations for the nine months ended
September 16, 2001; and
o Consolidated Statements of Cash Flows for the nine months ended
September 16, 2001.
(b) Pro Forma Financial Information.
The pro forma financial information required by Article 11 of the
Regulation S-X in connection with the transaction reported on this Form 8-K
is not included herein. Such pro forma financial information will be filed
no later than 60 days after the date this report must be filed.
(c) Exhibits.
Exhibit Description of Exhibits
Number
2.1 Agreement and Plan of Merger dated as of November 7,
2001, among Northrop Grumman Corporation, Newport News
Shipbuilding Inc. and Purchaser Corp. I filed as Annex
C to Form S-4 Registration Statement No. 333-61506
filed with the SEC on November 13, 2001 and
incorporated herein by reference.
4.1 Registration Rights Agreement dated as of January 23,
2001 by and among Systems, New Northrop Grumman and
Unitrin, Inc., filed as exhibit (d) (6) to Amendment
No. 4 to the Schedule TO filed with the SEC on January
31, 2001 and incorporated herein by reference.
4.2 Rights Agreement dated as of January 31, 2001 between
New Northrop Grumman and EquiServe Trust Company, N.A.
filed as exhibit 4.3 to Form S-4 Registration Statement
No. 333-54800 filed with the SEC on March 27, 2001 and
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NORTHROP GRUMMAN CORPORATION
Date: December 14, 2001
By: /s/ John H. Mullan
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John H. Mullan
Corporate Vice President and
Secretary