Defense company proposes to buy TRW Inc.

LOS ANGELES (Feb. 22)—Northrop Grumman Corp., an $18 billion global defense company, is proposing to acquire TRW Inc., a Groupe Michelin partner in tire pressure monitoring technology. The informal proposal to begin negotiations was made in a letter sent to TRW's CEO and lead director and requested a response by Feb. 27. The combination of Northrop Grumman's electronics and systems integration capabilities with TRW's space and systems expertise would create a strong contributor to the nation's satellite and missile defense requirements, the defense company said. Northrop said it would pay $47 worth of its common stock for each share of TRW and would immediately separate the automotive business of TRW following any agreed-upon transaction. TRW, which produces advanced-technology components for the aerospace and automotive markets, said its board is reviewing the proposal but in a written statement said it is "regrettable that Northrop Grumman has chosen to make this proposal immediately following the unexpected departure of (TRW's) former Chief Executive Officer David Cote, and the aberrationally low stock price that resulted."