Northrop Grumman has made the prospects of big defense consolidation a bit more interesting, offering to acquire Newport News Shipbuilding in what amounts to a hostile takeover attempt. Citing General Dynamics' proposed takeover of Newport News - a $2.6 billion deal which was announced last week - as "creating an unhealthy monopoly," Northrop Grumman has initiated its own takeover attempt. Specifically, Northrop Grumman's Board of Directors has authorized management to match General Dynamics' offer of $67.50 per share for all the outstanding shares of common stock of Newport News, payable 75 percent in Northrop Grumman stock, the remainder in cash. In a letter to Newport News Chairman and Chief Executive Officer William P. Fricks, Northrop Grumman Chairman, President and CEO Kent Kresa said that he believes that a "combination of Newport News and Northrop Grumman (which recently purchased shipbuilder Litton Industries) would offer a variety of strategic benefits, including significant cost savings to the U.S. Navy and the opportunity for Newport News employees to become a part of a larger, more diversified company. General Dynamics, as would be expected, was not happy with the counter offer. In a statement the company said: "We're disappointed that Northrop Grumman has chosen to interfere in a proposed transaction agreed upon by the respective boards of directors of General Dynamics and Newport News Shipbuilding. Northrop Grumman became the dominant player in surface warfare shipbuilding markets through its recent acquisition of Litton. It now seeks to become the dominant player in nuclear shipbuilding as well through a hostile offer. The combination of General Dynamics and Newport News is the only combination that can provide synergies necessary to achieve significant merger-related savings. It is also the only combination that offers the Navy depth of experience in the safe management of nuclear shipbuilding." Northrop Grumman, however, contends that a merger with it makes the most sense, arguing that "the product portfolios of Northrop Grumman and Newport News in no way overlap, provide opportunities for efficiencies, and the combination of our two companies would preserve the current competitive landscape of the military shipbuilding industry." "We believe, and we believe that many already agree, that there is enormous national security value for America in maintaining, not eliminating, opportunities for competition between General Dynamics and Newport News. In short, we believe the General Dynamics-Newport combination would endanger national security and be costly to both the Navy and the American taxpayer." Mr. Kresa said that, "The Board of Newport News has a fiduciary responsibility to seriously consider our offer, as we believe it provides superior overall value and greater certainty of completion than the current merger agreement with General Dynamics."