The US Navy threw its support behind Northrop Grumman Corp's plans to spin off its shipbuilding unit after the company agreed to make certain financial adjustments to cover possible risks.The Navy announcement came late on Tuesday after Northrop's board approved the creation of Huntington Ingalls Industries Inc, in a spin-off to shareholders.
The Navy's support paves the way for the new company to wrap up contracts for two new U.S. warships, and moves Northrop one step closer to finalizing the spin-off, which must still be approved by the US Securities and Exchange Commission, Reuters reports.
The defense contractor said the spin-off has been structured to qualify as a tax-free distribution for US federal tax purposes.
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