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GenCorp Discussing Possible Propulsion Joint Venture

12 August 1999

GenCorp Discussing Possible Propulsion Joint Venture

    FAIRLAWN, Ohio, Aug. 12 -- GenCorp announced today
that it is in preliminary discussions with another defense company regarding a
possible joint venture with its Aerojet segment's propulsion operations in
Sacramento, California.  Discussions involve the formation of a new joint
venture entity that would combine a significant portion of Aerojet's rocket
propulsion, missile, and other energetic product operations (about
one-third of the segment's net sales for the first six months of 1999, ended
May 31) with similar operations of the other company.  Both companies would
hold a near equal ownership in this new joint venture entity, with Aerojet's
potential joint venture partner having a majority interest.  It is also
expected that each owner would indemnify the new entity against certain
liabilities, including environmental, relating to the operations contributed
by that owner.
    "Aerojet's decision to consider joint venturing its propulsion business is
the result of an extensive strategic evaluation over the past year to address
the clear need for consolidation in an industry that suffers from excess
capacity," said Bob Wolfe, President of Aerojet.  "If successful, a joint
venture could revitalize our existing business, enhance our position to that
of a true leader in the propulsion industry, and assure a much healthier
future in propulsion," he said.
    Because discussions are preliminary and dependent upon negotiations, no
assurance can be given that this transaction will be completed, or what the
timing and final terms will be.  Any transaction is subject to, among other
things, due diligence and negotiations, approval by the boards of both
companies, clearance of a Hart-Scott-Rodino filing, and consent by the U.S.
Department of Defense.
    In addition to the major role it plays in propulsion, Aerojet is a leader
in advanced space electronics with expertise in satellite payloads used for
remote sensing and surveillance, and ground systems hardware and software and
a major producer of smart munitions.  Aerojet is a segment of GenCorp, a
technology-based manufacturer with leading positions in numerous polymer
product markets and the automotive industry, in addition to aerospace and
defense.