TRW Inc. today
announced that as part of its review of strategic alternatives, it has signed
a confidentiality agreement with Northrop Grumman Corporation who,
along with other interested parties, will begin receiving non-public
information shortly. Terms of the agreement were not disclosed.
Philip A. Odeen, chairman of TRW stated, “We are pleased that we have
reached a mutually acceptable agreement with Northrop and that it has chosen
to participate in the process our Board has established to deliver to TRW
shareholders the value they deserve. The focus of our Board has been on
enhancing shareholder value and this will not change. In addition to
exploring strategic alternatives, we are continuing to move forward with our
Value Enhancement Plan. We are confident that each of these avenues can
deliver value to TRW shareholders in excess of Northrop’s $53* per share
offer.”
TRW provides advanced-technology products and services for the aerospace,
systems, and automotive markets.
TRW common stock to be exchanged for that number of shares of Northrop Grumman
common stock having a value equal to $53. The exact exchange ratio would be
determined by dividing $53 by the average of the closing price of Northrop
Grumman common stock for the five consecutive trading days ending
immediately prior to the second trading day prior to the expiration of the
Offer to Exchange, but in no event will the exchange ratio be more than
0.4690 ($53/$113) or less than 0.4309 ($53/$123)
This press release contains certain “forward-looking statements” that TRW
believes are within the meaning of the Private Securities Litigation Reform
Act of 1995. The safe harbors intended to be created thereby are not
available to statements made in connection with a tender offer and TRW is not
aware of any judicial determination as to the applicability of such safe
harbors to forward-looking statements made in proxy solicitation materials
when there is a simultaneous tender offer. However, shareholders should be
aware that the preparation of any such forward-looking statements requires the
use of estimates of future revenues, expenses, activity levels and economic
and market conditions, many of which are outside the Company’s control.
Further, the Company’s results could be affected by the ability to obtain new
contract awards; the level of defense funding by the government and the
termination of existing government contracts; pricing pressures from
customers; moderation or decline in the automobile build rate; changes in
consumer debt levels; work stoppages; unanticipated downturn in the financial
condition of, or business relationships with customers or suppliers; the
ability to reduce the level of outstanding debt from cash flow from operations
and the proceeds from asset dispositions; a credit rating downgrade; increase
in interest rates; customer recall and warranty claims; product liability and
litigation issues; changes to the regulatory environment regarding automotive
safety; the introduction of competing products or technology by competitors;
the ability to attract and retain skilled employees with high-level technical
competencies; the financial results of companies in which we have made
technology investments; the availability of funding for research and
development; economic, regulatory and political domestic and international
conditions; fluctuations in currency exchange rates; and the impact of
additional terrorist attacks, which could result in reduced automotive
production, disruptions to the transportation system, or significant and
prolonged disruption to air travel. In addition, there can be no assurance:
(i) that an agreement relating to any investment in the Company, or relating
to any sale or other distribution of all or a part of the Company’s operating
businesses will be reached, or that if an agreement is reached, that the
transactions contemplated by such agreement will be consummated; (ii) that the
Company will spin off the Automotive business or that such spin-off will be
complete by the end of the fourth quarter 2002; (iii) that the Company will be
successful in reducing the amount of its indebtedness, or that the methods
described for debt reduction will be utilized; (iv) as to the amount by which
debt will be reduced; (v) that the Company’s strategy will deliver any
particular level of value to TRW shareholders; (vi) that defense spending will
rise and research, development, test and evaluation budgets will increase;
(vii) that the commercial aerospace industry will stabilize; (viii) that North
American 2002 light vehicle production will increase from 2001 levels; (ix)
that 2002 earnings per share estimates will be met or exceeded; (x) with
respect to the expected amounts of the Company’s operating cash flows in 2002,
that such amounts will be utilized to reduce the amount of the Company’s
indebtedness; (xi) with respect to the amounts that will be realized, if any,
by the Company from divestitures; (xii) with respect to the amount of sales,
earnings per share or cash flow that will be realized by the Company in 2002;
and (xiii) that the Company’s costs will decrease in 2002. Other factors and
assumptions not identified above are also involved in the preparation of
forward-looking statements, and the failure of such other factors and
assumptions to be realized may also cause actual results to differ materially
from those discussed. The Company assumes no obligation to update such
estimates to reflect actual results, changes in assumptions or changes in
other factors affecting such estimates other than as required by law.
