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March 3, 2004

United Defense completes Honolulu Shipyard acquisition

United Defense Industries, Inc. (NYSE:UDI) announced today that it has completed its acquisition of the U.S. Navy ship repair business of Honolulu Shipyard Inc. (HSI) for $16.1 million.

HSI had revenues of $40 million in 2003. The new company, Hawaii Shipyards, Inc., will continue to partner with Southwest Marine (SWM), a unit of United States Marine Repair (USMR), a UDI subsidiary. The Company recently announced a teaming agreement with Bath Iron Works, a subsidiary of General Dynamics (NYSE:GD), for work on the USS CHAFEE (DDG 90), home ported in Hawaii.

"I welcome the HSI team to our family of shipyards," said Al Krekich, president of USMR. "We look forward to working with this well-established, talented group of ship repair professionals. HSI has been a vital member of the community since the 1920's, and they have grown to become the premier ship repair firm on the island. Together we can provide the Navy with an even higher level of expertise and customer service."

United States Marine Repair serves the U.S. Navy, its primary customer, and other defense and commercial customers at ship repair operations in Norfolk, Va.; San Diego, San Francisco and San Pedro, Calif.; Pearl Harbor, Hawaii; and Ingleside, Texas.

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