Northrop Board Approves Shipbuilding Spinoff Deal

Mar 15, 2011

By Michael Fabey mike_fabey@aviationweek.com

Northrop Grumman’s board of directors has approved the spinoff of its wholly owned subsidiary Huntington Ingalls Industries to Northrop stockholders, subject to final U.S. Securities and Exchange Commission (SEC) clearance, the company confirmed March 15.

Northrop has been saying for months now that it would be exiting all or most of the U.S. military shipbuilding work as a business move. The company had said it would either sell or spin off its shipbuilding units but most in the industry said the spinoff was the more likely scenario.

Investors can view more information about the spin-off on the investor relations page of the Northrop website at northropgrumman.com, the company said.

“We have determined that a spin-off of our shipbuilding business will best serve our shareholders, customers and employees,” said Wes Bush, chief executive officer and president, in a statement. “The separation will enable (Ingalls) and Northrop Grumman to focus more intently on their respective customers.”

The Northrop board approved a pro rata dividend of Ingalls common stock owned by Northrop on March 31, 2011, the “distribution date” to Northrop stockholders of record as of the close of business of the New York Stock Exchange on March 30, 2011.

On the distribution date, Northrop stockholders of record will receive one share of Ingalls for every six shares of Northrop common stock they hold. No fractional shares of Ingalls common stock will be distributed. Fractional shares of Ingalls common stock will be aggregated and sold in the open market, and the aggregate net proceeds of the sales will be distributed ratably in the form of cash payments to Northrop stockholders of record who would otherwise be entitled to receive a fractional share of Ingalls common stock.

The distribution of Ingalls shares will be made in book entry form and no action or payment by Northrop stockholders is required to receive HII shares. No physical share certificates of Ingalls will be issued. An information statement containing details of the spinoff and important information about Ingalls will be mailed to Northrop stockholders prior to the distribution date.

Source : AviationWeek

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