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The Associated Press November 24, 2010, 3:57PM ET

Northrop weighs spinning off shipbuilding business

Northrop Grumman Corp. has a new name and chairman in mind for its shipbuilding business if it spins off the operation.

In a regulatory filing Wednesday, Northrop Grumman said the new company would be called Huntington Ingalls Industries Inc. and be based in Newport News, Va.

Its chairman would be retired U.S. Navy Admiral Thomas B. Fargo, a Northrop director.

However, the aerospace and defense contractor stopped short of committing to spinning off the shipbuilding operation into a new publicly traded company.

"We haven't completed our analysis of strategic alternatives," said Northrop spokesman Randy Belote. "No decision has been made whether we'll spin off the company, sell the company or retain it."

Northrop said in July that it would close a Louisiana shipyard by 2013 and consider shedding its shipbuilding business, which makes submarines, aircraft carriers and other vessels for the Navy. The company is consolidating shipyards on the Gulf Coast as it winds down production of Navy amphibious assault ships.

Last month, Cleveland Ship LLC wrote to the governors of Louisiana, Mississippi and Virginia and proposed to buy Northrop's military shipbuilding division. Cleveland Ship didn't indicate how much it would pay for the business.

In the filing with the Securities and Exchange Commission, the company said that Northrop Grumman stockholders would own all shares in the shipbuilding company. It hopes to list the new shares on the New York Stock Exchange under the ticker symbol "HII."

The new name would incorporate the history of Northrop's ship business, which is the successor to Newport News Shipbuilding, founded by Collis P. Huntington in 1886, and Ingalls Shipbuilding, created in 1938.

Shares of Northrop Grumman rose $1.36, or 2.2 percent, to $62.18 in afternoon trading.

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