Northrop Grumman Agrees to Buy TRW
CLEVELAND (AP) _ After months of wrangling, Northrop Grumman Corp. has agreed to buy TRW Inc. for $7.8 billion, nearly $2 billion more than it originally offered.
With the purchase, Northrop will become the nation’s second largest defense contractor, the companies announced Monday.
In February, Northrop offered $5.9 billion _ $47 per share _ to buy Cleveland-based TRW, a defense, aerospace and auto parts company.
When TRW said the offer underestimated the value of the company, Northrop, based in Los Angeles, raised its bid to $6.7 billion, $53 per share.
TRW executives said the increased offer was still too low, and shareholders rejected several Northrop proposals to force TRW to accept the bid. Northrop ultimately agreed to sit down with TRW and negotiate a new price, which resulted in Monday’s announcement.