TRW Inc. is stepping up plans to spin off its automotive unit, filing with the Securities and Exchange Commission to create an independent, $10 billion TRW Automotive Inc. by the end of this year.
The plan still requires shareholder approval and does not specify a date or the number of shares current TRW stockholders would receive in the new company, but it does continue Cleveland-based TRWs previously stated goal of divesting the auto unit.
The auto unit, based in Livonia, Mich., has been up for grabs since February when TRW competitor Northrop Grumman Corp. considered buying TRW and shedding the division.
TRW Automotive, which ranks as one of the top two providers of occupant safety systems, makes plastics parts including air-bag and seat-belt components, plus heating and air conditioning parts.
TRW Inc. has not finalized the spin-off. Its SEC filing offers no specific dates for a shareholder meeting to approve it and presents no value in its potential stock. In addition, the company notes it first must complete a sale of its aeronautics division to pay down debt before proceeding with the auto proposal.
But it does provide a list of "benefits" to an independent TRW Automotive, focusing on its competitive flexibility in the industry as a pure-play auto company.
"We will no longer have to compete with other businesses of TRW for funding," the document states. "Our management will be able to devote more attention to and focus on the automotive business than it was able prior to the spin-off."
TRW Inc. is in negotiations to sell the aeronautics business to multiple companies, including Los Angeles-based Northrop Grumman.
"We continue to make good progress on the exploration of other strategic alternatives," TRW Chairman Philip Odeen said in a June 4 announcement. We are in the process of sharing confidential information with several interested parties and are quite pleased with the level of interest expressed in TRW.