ArvinMeritor, Apollo Rumored To Bid TRW's Auto Unit

Autoparts Report, Nov 5, 2002

ArvinMeritor Inc. along with private equity firm, Apollo Management, is considering a bid of more than $4.5 billion for TRW Inc.'s auto parts unit, according to several reports. The other bidders are reported to be buyout firms Blackstone Group and Carlyle Group who are said to have jointly bid $4.5 billion for the auto parts unit.

The two firms recently slashed their tentative offer by 10 percent in the wake of a continuing slump in the auto parts industry and other factors, sources said. Apollo, a $13.5 billion fund founded by former Drexel Burnham Lambert partners, has not conclusively decided to join with ArvinMeritor in a bidding war for the TRW unit, sources said. However, New York based Apollo has recently stepped up efforts to invest in the industrial and manufacturing sectors, particularly companies in distress, fund officials have said.

Recently, for instance, Apollo agreed to invest $500 million into U.S. Steel Corp. assets. Defense contractor Northrop Grumman Corp. agreed on July 1 to buy TRW for $60 a share in stock in a transaction then valued at $7.8 billion, plus assumed debt at the time of closing. Northrop Grumman has been in advanced discussions to sell the TRW auto parts unit to Blackstone and Carlyle for several months.