Cleveland Ship bids for Northrop Grumman's shipbuilding unit

Cleveland Ship LLC, a company formed to bid for a new class of U.S. Navy oilers, said it made an offer for Northrop Grumman Corp.'s shipbuilding unit.

The company, based in Cleveland, didn't specify the value of its Sept. 23 bid in an e-mailed statement dated yesterday. Cleveland Ship said it had expressed interest earlier this year in buying Northrop's shipyard in Avondale, Louisiana. Locally, Northrup has operations in Rolling Meadows.

A Navy plan announced last month to accelerate production of double-hulled oilers may enable Northrop, the largest maker of Navy vessels, to keep the Louisiana shipyard open long enough to find a seller. The company had said in July it would shut the shipyard and shift operations to a Mississippi facility as a first step in selling or spinning off the ship unit.

The ship division may be worth as much as $4.6 billion in a sale at an average industry multiple, based on data compiled in July by Bloomberg.

Cleveland Ship is proposing a new fleet of double-hulled oilers for the Navy to replace its current fleet of single- hulled ships and that program may be worth $8 billion, Chief Executive Officer Edward Bartlett said in the statement. Bartlett is a retired U.S. Navy officer and former executive at DRS Power Systems, according to the Cleveland Ship website.

Cleveland Ship sees an opportunity for $10 billion to $12 billion in new business bookings at Avondale over the next decade or so, Bartlett said in the statement.

Northrop does not comment on "issues regarding mergers, acquisitions or divestitures," Randy Belote, a spokesman for the Los Angeles-based company, said by telephone.

Defense News, an industry publication, first reported Cleveland Ship's bid on its website yesterday.