Posted: Mon, Jul 1, 2002, 10:14 AM ET (1414 GMT)
Northrop Grumman announced Monday that it has reached an agreement to purchase aerospace company TRW for an estimated $7.8 billion. Northrop officials, in a press release Monday morning, said TRW accepted a bid of $60 a share for the entire company, although Northrop plans to later sell off TRW's automotive business, and will permit a planned $1.5 billion sale of its aeronautical systems unit to Goodrich to continue. The agreement consummates a four-month pursuit of the company that Northrop started in late February when it offered $47 a share for the Cleveland-based company. TRW rejected that and higher unsolicited offers, and then accepted bids from TRW and several other companies, including General Dynamics, Raytheon, and BAE Systems, to purchase either the entire company or its aerospace and defense units. Those bids were submitted last week and reports indicated that Northrop, who submitted a new, higher bid, along with General Dynamics, were the front-runners. The merger still requires regulatory review, including approval by the Pentagon, but no serious obstacles are foreseen. The merger is expected to close in the fourth quarter of 2002.
