TRW Sells Aeronautical Unit, Pursues Business Split

TRW Inc., which has rebuffed a number of takeover moves in the past year, today announced that it has reached a definitive agreement under which Goodrich Corporation will acquire its Aeronautical Systems business (formerly Lucas Aerospace) for $1.5 billion U.S. in cash.
It is expected that the sale of TRW’s Aeronautical Systems business, which is subject to customary U.S. and European regulatory approvals, will close by the early fourth quarter of 2002. Proceeds will be used to reduce debt. During the transition period prior to closing, TRW says it will remain fully committed to meeting its customers’ needs.
“We are very pleased with the successful sale of our Aeronautical Systems business,” said Philip A. Odeen, TRW Chairman. “The Aeronautical Systems business is recognized worldwide for its quality, service and engineering expertise, and is a leader in its respective markets. These achievements were made possible by the thousands of dedicated employees who have worked so hard to make this business truly world class. Goodrich, a premier aerospace enterprise with leading global market positions and world-class products, is an excellent fit for this business. We believe the combination will benefit our customers and our employees, as well as Goodrich and its shareholders.
TRW is most familiar to those in the automotive business for its chassis, driveline and brake parts businesses. In previous releases regarding the proposed takeovers, it was regularly mentioned that the company’s automotive business would be severed following any merger as the attraction for suitors was the high-tech, aerospace business components. TRW had itself also announced that it would be independently be dividing its businesses in what it calls its "value enhancement plan."
“Our previously announced value enhancement plan calls for the creation of two appropriately capitalized, pure play independent companies: TRW Automotive Inc. and one that comprises TRW’s remaining Systems and Space & Electronics businesses. Both would be leaders in their respective industries. Proceeds from the sale of Aeronautical Systems will enable TRW to accelerate its debt reduction program and pave the way for the separation of the automotive business in a tax-efficient manner,” Odeen said in the latest release.
TRW reiterated that in addition to pursuing its value enhancement plan, the company continues to explore other strategic alternatives to enhance shareholder value. At present, the company is in talks with several potential merger partners.