Northrop Grumman Reaches Agreement on TRW Acquisition

Northrop Grumman Corporation announced today that it has agreed on the essential terms of a consent decree with the United States Department of Justice that should allow the company to promptly close its acquisition of TRW, Inc. after shareholders of both companies approve the transaction at separate meetings December 11, 2002.

Key provisions of the consent decree are intended to assure that the merger will not impede fair and open competition related to certain electronic satellite payloads. As expected, the consent decree does not require the divestiture of any businesses and will permit Northrop Grumman to operate its businesses and those of TRW as planned. The European Union antitrust authority approved the transaction Oct. 16, 2002. "We are pleased to complete another significant milestone in our planned acquisition of TRW," said Kent Kresa, Northrop Grumman chairman and chief executive officer. "Northrop Grumman has always championed open and fair competition and this agreement reflects our continued commitment to this principle. This combination will produce a strong competitor in complex space systems important to future defense requirements." On July 1, 2002, Northrop Grumman and TRW entered into a definitive agreement. The agreement stated that Northrop Grumman would acquire TRW in exchange for Northrop Grumman common stock. The exact exchange ratio will be determined by dividing $60 by the average of the reported closing sale prices per share of Northrop Grumman common stock on the New York Stock Exchange for the five consecutive trading days ending on and including the second trading day prior to the closing of the merger. The exchange ratio will not be less than 0.4348 or more than 0.5357 of a Northrop Grumman share. Assuming a closing date of Dec. 11, the five-day trading period commenced Dec. 3.