TRW Announces Sale of Four Automotive Businesses

17 May 1999

TRW Announces Sale of Four Automotive Businesses; Asset Disposition Part of Plan to Deleverage Balance Sheet

    CLEVELAND--May 17, 1999--TRW Inc. , following the acquisition of LucasVarity plc, announced today that it will divest the following four automotive operations: the engine businesses, consisting of TRW Engine Components and Lucas Diesel Systems operations; TRW Nelson(R) Stud Welding; and the LucasVarity Wiring companies.
    "Debt reduction is an immediate priority for TRW," said Joseph T. Gorman, chairman and chief executive officer. "Exiting these businesses will contribute significantly to the timely achievement of that goal."
    Net proceeds from these divestitures, estimated to be $1.2 billion to $1.5 billion, will be applied to reduce debt incurred to finance the acquisition of LucasVarity. The company has established a goal of reducing its net debt during the next 18 months by approximately $2.5 billion, including divestiture proceeds.
    "These four businesses were selected following a rigorous strategic assessment of our portfolio and a determination of which operations were key to the growth of TRW Automotive," Gorman said.
    "Divesting these noncore operations permits TRW to focus on the growth synergies of its newly formed automotive units. With the addition to TRW of LucasVarity's strong product lines, the company's automotive growth will come from integrated vehicle control, including steering, suspension, and antilock brakes; occupant safety restraint systems, including seat belts, steering wheels and air bags; and related electronics, aftermarket, and fasteners.
    "Leaders in their respective markets, each of these businesses is recognized for quality, service and engineering expertise," said Gorman. "We already have received unsolicited overtures from parties interested in acquiring them. I am confident we will find buyers who are committed to their continued growth and am optimistic we can complete these sales by year-end 1999. Until then, customers can be assured of TRW's unwavering commitment to service, delivery and product assistance."
    TRW has retained J.P. Morgan to advise in the divestiture of the engine components business, Lazard Freres for diesel systems, and McDonald Investments Inc. for Nelson Stud Welding.
    TRW Engine Components is a global leader in the manufacture of automotive engine components, including valves, cotters, rotators, retaining caps, and valve train systems. With affiliates, the company produces more than 300 million engine valves annually and is a leader in the manufacture of smaller-stem-diameter valves used in multivalve engines. It has approximately 6,000 employees and operates in 12 countries.
    Lucas Diesel Systems, employing 9,200, is one of the world's largest manufacturers of diesel fuel injection systems, serving the car, van, truck, bus, agricultural, industrial and marine sectors. It supplies fuel injection systems to more than one third of the European diesel car and van market, and its customers include all of Europe's major diesel engine manufacturers.
    TRW Nelson(R) Stud Welding, the oldest and best-known name in stud welding, is the world's leading producer of stud welding fasteners and equipment. Nelson Stud Welding employs about 250 people.
    The Lucas Wiring businesses, previously announced for sale March 29, are the leading U.K. supplier of electrical wiring systems. Lucas Wiring employs 5,500 people and has operations in the U.K., Germany, Poland, Slovakia, Egypt and Turkey. Lucas Wiring products include electrical wiring and distribution systems, HT and battery cables, small harnesses, components and fuse boxes, cables and advanced systems products.
    Certain statements contained in this press release, particularly those regarding debt reduction, depend on certain events, risks and uncertainties that may be outside of the companies' control. Additional information concerning factors that could cause actual results to differ materially from the forward-looking statements are discussed in TRW's most recent annual report on Form 10-K and other reports filed with the Securities and Exchange Commission.
    TRW provides advanced technology products and services for the global automotive, aerospace and information systems markets. The company's news releases are available through TRW's corporate Web site (http://www.trw.com).