TRW Inc. said it plans to spin off its auto parts business within six to nine months.
The company made the announcement after it rejected for the second time a $6 billion takeover offer from defense contractor Northrop Grumman Corp.
TRW's auto business, which generated about $10 billion in sales globally last year, is centered around safety restraints, brakes and steering systems.
The company ranks No. 8 on the Automotive News list of top 150 original equipment suppliers to North America.
Potential buyers would include the industry's two largest suppliers, Delphi Automotive Systems Corp. and Visteon Corp., as well as Continental AG of Germany and Lear Corp.
Shareholders of the Cleveland-based company must choose between TRW's plan or Northrop's offer, which expires at midnight on March 29.
When it announced its bid for TRW, Northrop said it would spin off the auto parts business.
TRW will use the money from selling the auto parts business to reduce its debt, which stands at about $5 billion.