Equity buyout specialist Blackstone Group is ready to spend $4.7 billion to take over the automotive division of TRW Inc., itself awaiting completion of a sale to Northrop Grumman Corp.
The automotive supplier, a global maker of safety systems, steering wheels and other plastics-intensive components, has been in play since spring, when Los Angeles-based Northrop Grumman launched a bid to take over TRW's aerospace holdings to bolster its offerings to the defense industry.
The company did not want the auto unit, with more than $10 billion in sales, however.
Cleveland-based TRW has shopped its auto unit to prospective buyers and alternatively prepared to spin it off to existing shareholders, but on Nov. 19, the New York financial group announced it had agreed to buy it.
The deal is contingent on completion of the Northrop Grumman buyout of TRW, expected in December.
Blackstone will finance the purchase through its recently completed, $6.45 billion equity fund. Blackstone has experience in the auto supplier sector. It was a majority holder of Collins & Aikman Corp. before 2001 and is a major holder of American Axle & Manufacturing Holdings Inc. In the plastics arena it also owns a controlling interest in Graham Packaging Co. LP.