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Transactions:  An Antitrust Roller Coaster

 

A New Orleans institution, Avondale Shipyards, the largest private employer in the metropolitan area, followed Howard Sinor to the firm when he joined in 1999. Howard had assisted Avondale on antitrust matters for a number of years. After coming aboard at Gordon Arata, he continued to advise Avondale about potential antitrust issues in its proposed merger with Newport News Shipbuilding, Inc.  Howard worked with Gordon Arata colleagues and Avondale's management team to convince the U.S. Justice Department and the Department of Defense (Avondale's principal customer) that the merger was beneficial for both competition and defense readiness.

 

Competing Bids at the Last Minute

However, new complications arose. First, General Dynamics (owner of three major shipyards) announced an unsolicited offer to acquire Newport News—an offer that specifically excluded Avondale. Our team made a new argument before the same Justice and Defense Department officials, who ultimately endorsed our position that the General Dynamics acquisition should not be approved. Then, in a further twist, Litton Industries, the owner of Ingalls Shipyards, made an unsolicited offer to acquire both Avondale and Newport News. When Avondale's board ultimately voted to accept the Litton offer, we again helped Avondale make presentations to the (by now bemused) officials at the Departments of Justice and Defense, this time supporting a merger with Litton. These efforts were also successful, and Avondale merged with Litton effective August 1, 1999.

 

Thorough Analysis

Looking back on an exciting seven months, Howard observes: "The matter was unique both because of its roller-coaster quality and also because of the central involvement of the Pentagon. Working with very knowledgeable Avondale personnel, Gordon Arata's team drew on all our resources to study and statistically analyze American shipbuilding and its critical role in the nation's defense."  The thoroughness of our work defused what otherwise could have been a tough situation if the powers that be had lost their patience.

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