Northrop Grumman finds buyer for TRW auto unit

Northrop Grumman Corp. has signed a definitive agreement to sell the automotive division of TRW Inc. to the Blackstone Group.

The value of the transaction is about $4.7 billion, the company said Nov. 19.

The sale of the automotive unit is conditional upon the closing of the Northrop Grumman and TRW merger.

Northrop Grumman of Los Angeles made its first unsolicited offer for TRW in February. The two companies spent months dueling as Cleveland-based TRW sought to remain independent.

Northrop Grumman and TRW announced in July they had reached a merger agreement.

Under the terms, Northrop Grumman agreed to pay $60 per share for TRW stock, making the transaction worth about $7.8 billion; Northrop Grumman also will assume TRW's debt.

Shareholders of both companies are scheduled to vote on the merger Dec. 11.

European review of antitrust concerns has been completed, and the merger was given the green light, a Northrop Grumman spokesman said.

U.S. regulators have not yet signed off on the deal, but the company is confident the merger will close by the end of December, the spokesman said.

The automotive business of TRW has been on the block ever since Northrop Grumman first announced its acquisition plan. TRW even announced its own plans to spin off the business as part of its strategy to evade Northrop Grumman's advances.

"We're very pleased to announce the sale of TRW Automotive. As we've maintained, Northrop Grumman's strategic interest is in TRW's space, electronics and systems businesses," said Kent Kresa, Northrop Grumman's chairman and chief executive officer.

The Blackstone Group is a New York private investment firm. It recently raised a private equity fund of $6.5 billion. The purchase of TRW Automotive will be the first investment made by the fund.

Northrop Grumman Corp. recorded revenue of $13.6 billion in fiscal 2001, and is on track to reach $17 billion this year, not including TRW's revenue, a company spokesman said. It employs nearly 96,000 people and operates in 44 states and 25 countries.