Northrop will also assume about $4 billion in TRW debt in the deal.
After completion of the merger, Northrop Grumman said it plans to separate TRW's automotive business, either through a sale or a spinoff of the business to shareholders. TRW's previously announced agreement to sell its Aeronautical Systems business to Goodrich Corp. for $1.5 billion will remain unaffected by today's announcement, the company said.
TRW's defense business, similar to the Litton and Newport News businesses, will be initially operated as a separate Northrop Grumman sector, reporting to the office of the chairman. Northrop Grumman, which will integrate the operations of TRW's defense business operations, said it foresees little change in employment levels in the defense business as a result of this transaction.
The companies expect to complete the transaction in the fourth quarter of 2002.