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February 22, 4:00 EST
LOS ANGELES -- Officials at Northrop Grumman Corp. have forwarded a proposal to the board of directors at TRW in Redondo Beach, Calif., to enter into negotiations to combine the two companies. The combined company would create an electronics powerhouse in military and space technology.
"We believe the strategic combination of Northrop Grumman and TRW will provide tremendous value to the shareholders of both companies," says Kent Kresa, Northrop Grumman's chairman and chief executive officer. "Northrop Grumman's electronics and systems integration capabilities, combined with TRW's space and systems expertise, would create a strong contributor to the nation's satellite and missile defense requirements.
"This combination would further our long-term strategic goals by strengthening our space business, adding communications technology and capabilities, and enhancing our information technology business," Kresa adds. "We expect that, once we reach a timely agreement with the TRW board of directors, we will be able to close this transaction in the 2002 third quarter."
In the proposal to TRW, Kresa wrote that with full cooperation from both sides he believes an acquisition agreement can be reached by March 11, 2002. He also stated that "a transaction could realistically be completed in the third quarter of this year."
TRW provides advanced-technology products and services for the aerospace, information systems and automotive markets worldwide. The company generated year-end 2001 sales of $16.4 billion. Northrop Grumman, an $18 billion, global defense company, provides products, services, and solutions in defense and commercial electronics, systems integration, information technology, and nuclear and non-nuclear shipbuilding and systems.
"This transaction would strengthen our portfolio, and would bring together the advanced technologies and extraordinary human talent of both companies," says Ronald D. Sugar, Northrop Grumman's president and chief operating officer. "With the integration of our 2001 acquisitions largely behind us, we are confident that our management, in conjunction with the leadership of TRW, can quickly and successfully integrate the defense and aerospace businesses of Northrop Grumman and TRW."
Immediately following the close of the transaction, Northrop Grumman officials would expect to separate TRW's automotive business, Northrop Grumman officials say. Excluding TRW's automotive business, Northrop Grumman projects combined 2003 sales of approximately $26 billion to $27 billion, company officials say. The proposed transaction would deliver $47 in value of Northrop Grumman common stock for each share of TRW.
For more information on Northrop Grumman contact the company on the World Wide Web at http://www.northropgrumman.com. For more information on TRW contact the company on the World Wide Web at http://www.trw.com.
Military & Aerospace Electronics
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