Northrop Grumman has agreed to sell TRW's $10 billion automotive components business to a private investment company, completing a key step in its plan to acquire TRW's defence and space business. The Blackstone Group's agreement to purchase TRW Automotive for just over $4.7 billion is conditional on the Northrop Grumman/TRW merger receiving anti-trust approval. The US government has asked for more time to review the merger.
Under the agreement, Northrop Grumman will receive $3.76 billion in cash, $600 million in debt securities and an initial $368 million equity interest (42%) in a standalone TRW Automotive. But Northrop Grumman expects to reduce its equity interest to 20% by the time of closing, expected in the first quarter of next year, which would increase the cash payout to around $4 billion. The proceeds will be used to pay down debt resulting from the TRW acquisition. Northrop Grumman and TRW still plan to close the merger by year-end.
Source: Flight International