TRW Inc., which owns TRW Systems Northeast of Warwick, has announced that it has reached a definitive agreement under which Goodrich Corporation will acquire TRW’s Aeronautical Systems business (formerly Lucas Aerospace) for $1.5 billion 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 will remain fully committed to meeting its customers’ needs.
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“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.
“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.
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 the process of sharing confidential information with several interested parties. Ultimately, TRW’s Board of Directors will choose the path that it believes is in the best interest of TRW shareholders.
With the announcement of the sale, TRW will report Aeronautical Systems as a discontinued operation. Reflecting the sale of the Aeronautical Systems business, TRW’s operating earnings per share from continuing operations in the second quarter of 2002 are expected to be $0.98 to $1.00, excluding unusual items. TRW expects to update its guidance for the year at the time of its second quarter earnings release.
With sales of $1.1 billion in 2001, TRW Aeronautical Systems is a leading supplier to all major civil and military aerospace programs in the Western world. It is based in Solihull, U.K. and has manufacturing facilities and other operations in nine countries worldwide. The business employs approximately 6,200 people.
