Exhibit 99.1
Contact: Jim Taft (Media) (310) 201-3335
Gaston Kent (Investors) (310) 201-3423
For Immediate Release
NORTHROP GRUMMAN DISCUSSING AMENDMENT
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TO POST-TENDER MERGER TERMS FOR LITTON STOCK
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LOS ANGELES -- Jan. 16, 2001 -- Northrop Grumman Corporation
(NYSE: NOC) announced today that it is holding discussions with
Litton Industries Inc. (NYSE: LIT) and Litton's largest
shareholder, Unitrin Inc. (NASDAQ: UNIT), to potentially amend the
post-tender merger terms of its previously announced tender offer
for all outstanding shares of Litton stock. The amendment would
include the option for Litton shareholders to receive a limited
number of shares of Northrop Grumman stock on a tax-free basis in
lieu of cash.
If such an amendment is implemented, it is not expected to
affect the pending cash tender offer for all of Litton's
outstanding stock, which commenced on Jan. 5, 2001, and will
expire on Feb. 2, 2001, unless extended. Northrop Grumman and
Litton jointly announced on Dec. 21, 2000, that they had signed a
definitive agreement under which Northrop Grumman will acquire for
cash all Litton common stock for $80 per share and Series B
preferred stock for $35 per share in a transaction valued at
approximately $5.1 billion, which includes the assumption of
Litton's $1.3 billion in net debt.
The amendment under discussion would provide Litton
shareholders with the opportunity to receive stock of the combined
company in a second step merger designed to allow a tax-free
exchange for shares of Litton common stock for Northrop Grumman
stock. The stock offering would consist of not more than 14
million shares of
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NORTHROP GRUMMAN DISCUSSING AMENDMENT
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TO POST-TENDER MERGER TERMS FOR LITTON STOCK
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common stock and approximately $350 million of new convertible
preferred Northrop Grumman stock. Stockholders electing to receive
stock in the merger would be subject to proration if such
elections exceeded the amount of stock made available. All Litton
common stock not exchanged for Northrop Grumman stock would be
exchanged for $80 per share in cash. As part of the amendment, the
parties would seek to avoid any discrepancy between the value of
the stock issued in the second step merger and the $80 per share
cash price.
Northrop Grumman also stated that because of the complex
issues involved, there is no assurance that the amendment under
discussion will be implemented. If an amendment is not agreed
upon, Northrop Grumman and Litton will continue the current tender
offer and associated merger as previously announced.
Northrop Grumman stated that the amendment would not affect
the value of the transaction as previously reported and that the
company continues to expect the acquisition will be 7 to 10
percent accretive to economic earnings (earnings excluding pension
income and amortization) and neutral to GAAP earnings per share in
2001. The company said it expects the acquisition to be
double-digit accretive to both economic and GAAP earnings per
share in 2002 and beyond.
Northrop Grumman Corporation, headquartered in Los Angeles,
is a world-class, high technology company providing innovative
solutions in systems integration, defense electronics and
information technology for its U.S. and international military,
government and commercial customers, as a prime contractor,
principal subcontractor, team member or preferred supplier. The
company had revenues of $7.6 billion in 1999 (restated) and has a
workforce of approximately 39,000 employees.
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NORTHROP GRUMMAN DISCUSSING AMENDMENT
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TO POST-TENDER MERGER TERMS FOR LITTON STOCK
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Note: Certain statements and assumptions in this release contain
or are based on "forward-looking" information (that the company
believes to be within the definition in the Private Securities
Litigation Reform Act of 1995) and involve risks and
uncertainties. Such "forward-looking" information includes the
statements above as to the impact of the proposed acquisition on
revenues and earnings. Such statements are subject to numerous
assumptions and uncertainties, many of which are outside the
company's control. These include the company's ability to
successfully integrate the operations of Litton, assumptions with
respect to future revenues, expected program performance and cash
flows, the outcome of contingencies including litigation,
environmental remediation, divestitures of businesses, and
anticipated costs of capital investments. The company's operations
are subject to various additional risks and uncertainties
resulting from its position as a supplier, either directly or as
subcontractor or team member, to the U.S. Government and its
agencies as well as to foreign governments and agencies; actual
outcomes are dependent upon factors, including, without
limitation, the company's successful performance of internal
plans; government customers' budgetary restraints; customer
changes in short-range and long-range plans; domestic and
international competition in both the defense and commercial
areas; product performance; continued development and acceptance
of new products; performance issues with key suppliers and
subcontractors; government import and export policies; acquisition
or termination of government contracts; the outcome of political
and legal processes; legal, financial, and governmental risks
related to international transactions and global needs for
military aircraft, military and civilian electronic systems and
support and information technology; as well as other economic,
political and technological risks and uncertainties and other risk
factors set out in the company's filings from time to time with
the Securities and Exchange Commission, including, without
limitation, the company's reports on Form 10-K and Form 10-Q.
If the amendment is adopted, the company will file the appropriate
documentation with the Securities and Exchange Commission and will
distribute a supplement to the offering materials to Litton
shareholders. Litton shareholders are urged to read carefully the
complete offering materials which contain important information.
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0101-08
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