FILING PURSUANT TO RULE 425 OF THE
SECURITIES ACT OF 1933, AS AMENDED
FILER: NORTHROP GRUMMAN CORPORATION
SUBJECT COMPANY: TRW INC. NO 1-2384
FILING: REGISTRATION STATEMENT ON
FORM S-4 (REGISTRATION NO.
333-83672)
The text of the following press release was issued by TRW Inc. on
March 3, 2002.
NORTHROP GRUMMAN FILED A REGISTRATION STATEMENT ON FORM S-4 (FILE NO.
333-83672) AND A TENDER OFFER STATEMENT ON SCHEDULE TO WITH THE SECURITIES AND
EXCHANGE COMMISSION ON MARCH 4, 2002 WITH RESPECT TO ITS OFFER TO EXCHANGE ALL
OUTSTANDING SHARES OF TRW CAPITAL STOCK FOR NORTHROP GRUMMAN STOCK. THESE
DOCUMENTS CONTAIN IMPORTANT INFORMATION. TRW SHAREHOLDERS SHOULD READ THESE
DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS THERETO BEFORE MAKING ANY DECISION
REGARDING THE OFFER TO EXCHANGE. COPIES OF SUCH DOCUMENTS MAY BE OBTAINED
WITHOUT CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
WWW.SEC.GOV. OR FROM D.F. KING & CO., INC., THE INFORMATION AGENT FOR THE OFFER
TO EXCHANGE, AT 800-755-7520.
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TRW BOARD REJECTS NORTHROP GRUMMAN PROPOSAL
CLEVELAND, March 3, 2002 - TRW Inc. (NYSE: TRW) announced today that its board
of directors has unanimously determined to reject Northrop Grumman Corporation's
(NYSE: NOC) proposal set forth in its letter dated February 21, 2002 to acquire
all of the outstanding shares of TRW for $47 per share in Northrop Grumman
stock. After careful consideration, including consultation with independent
financial and legal advisors, the TRW board of directors concluded that Northrop
Grumman's proposal was financially inadequate. The board noted its belief that
the Northrop Grumman proposal grossly undervalues TRW's advanced portfolio of
technology and market leadership positions in space, defense, information
systems and automotive parts, and is not consistent with the board's objective
of enhancing shareholder value.
"This is all about shareholder value," said Philip A. Odeen, TRW's chairman,
"and the Northrop Grumman proposal does not begin to recognize the value of
TRW's franchise."
Following is a letter sent today from TRW chairman Philip A. Odeen and lead
director Kenneth A. Freeman to Kent Kresa, chairman and chief executive officer
of Northrop Grumman.
March 3, 2002
Mr. Kent Kresa
Chairman of the Board and Chief Executive Officer
Northrop Grumman Corporation
1840 Century Park East
Los Angeles, CA 90067
Dear Mr. Kresa:
The board of directors of TRW has met to consider Northrop Grumman's
February 21 proposal to acquire TRW for $47 per share in stock.
After careful consideration, including a thorough review of the proposal
with our independent financial and legal advisors, the board has determined
not to pursue discussions with regard to Northrop Grumman's proposal.
Simply put, the board has unanimously concluded that Northrop Grumman's
proposal is financially inadequate. We believe Northrop Grumman's proposal
grossly undervalues TRW's businesses, including its premier franchise in
the defense industry, does not adequately reflect the true value of our
unique market position and business opportunities, and is not consistent
with our objective of enhancing shareholder value.
(more)
Page 2
In making this determination, and based on your letter, we have assumed
that the $47 per share would be in fixed value and that the timing or
closing of such transaction would not be conditioned in any way upon the
separation of our automotive business. Accordingly, our board has
determined that there is no reason to explore Northrop Grumman's proposal
further.
The board views Northrop Grumman's proposal as an opportunistic attempt to
acquire one of the industry's leading space and electronics and systems
businesses at a time when TRW's stock price was temporarily depressed after
the sudden departure of David Cote, our former chairman, president and
chief executive officer. In addition, as of March 1, 2002, TRW's stock
price closed at $50.05 per share, over $3 per share higher than Northrop
Grumman's proposal.
TRW is positioned for future technology-driven growth. Our space and
defense businesses are in the "sweet spot" of growth in national defense
and homeland security. Our aeronautical business is a global leader in
control systems and product support and is well positioned for growth as
the commercial aerospace sector continues to rebound. Our global automotive
business is a market and technology leader in our product segments and is
generating strong cash flow, even at the bottom of the automotive cycle. We
have been driving cost reductions and productivity improvements, while
creating a customer-focused, performance-driven culture. Over the past
three years, we have reduced net debt by $3.9 billion. In 2001, we exceeded
earnings expectations for each quarter and are on track to meet 2002
expectations.
We are confident in TRW's ability to continue to take the steps necessary
to fully realize the value of our franchise. Toward this end, the board's
executive search committee, comprised of outside directors, has selected a
prominent executive search firm and is actively engaged in a search for a
new chief executive officer. As you know, TRW has an experienced senior
management team and an outstanding employee base. We are 94,000 strong
worldwide and our employees are highly committed to the company and their
customers in the aerospace, systems and automotive businesses. With our
unparalleled technologies and market leading positions, we are confident
that great things can continue to be expected from TRW.
Sincerely,
//s// Philip A. Odeen //s// Kenneth W. Freeman
Philip A. Odeen Kenneth W. Freeman
Chairman Lead Director
Goldman, Sachs & Co. and Credit Suisse First Boston Corporation are serving as
financial advisors to TRW, and Skadden, Arps, Slate, Meagher & Flom LLP is
serving as legal counsel.
Statements that are not statements of historical fact may be forward-looking
statements. Important factors that could cause TRW's actual results to differ
materially from the forward-looking statements contained in this release can be
found in TRW's most recent quarterly report on Form 10-Q for the quarter ended
September 30, 2001.
This release does not relate to Northrop Grumman's exchange offer announced
March 3, 2002. Shareholders of TRW are advised to read TRW's Solicitation /
Recommendation Statement on Schedule 14D-9 when it becomes available because it
will contain important information. Shareholders of TRW and other interested
parties may obtain, free of charge, copies of the Schedule 14D-9 and other
documents filed by TRW at the SEC's internet website at www.sec.gov. Each of
these documents may also be obtained, free of charge, by calling investor
relations at TRW at 216-291-7506.
TRW provides advanced-technology products and services for the aerospace,
systems, and automotive markets.