8-KOther EventsExhibits & Filings

NORTHROP GRUMMAN CORP /DE/ 8-K Report, Corporate Update (Nov 10, 2009)

Filed November 10, 2009For Securities:NOC

Summary

Northrop Grumman Corporation (NOC) announced a significant strategic divestiture and capital allocation update. The company has entered into a definitive agreement to sell its advisory services business, TASC, Inc., to an investor group led by General Atlantic LLC and affiliates of Kohlberg Kravis Roberts & Co. L.P. for $1.65 billion in cash. This sale is anticipated to yield approximately $1.1 billion in net cash proceeds after accounting for taxes, with the transaction expected to close by the end of 2009, subject to regulatory approvals. In conjunction with the divestiture, Northrop Grumman's Board of Directors has approved a substantial increase to its share repurchase program. An additional $1.1 billion has been added to the existing authorization, which had roughly $280 million remaining at the close of the third quarter of 2009. The company explicitly stated its intention to utilize the net proceeds from the TASC, Inc. sale to fund these share repurchases, signaling a clear commitment to returning capital to shareholders.

Key Highlights

  • 1Agreement to sell TASC, Inc. for $1.65 billion in cash to an investor group.
  • 2Expected net cash proceeds from the sale are approximately $1.1 billion after taxes.
  • 3Transaction is subject to customary regulatory conditions, including Hart-Scott-Rodino approval.
  • 4Deal is anticipated to close by the end of 2009.
  • 5Board of Directors approved an additional $1.1 billion for share repurchases.
  • 6The Company plans to use the net proceeds from the TASC sale to fund share repurchases.
  • 7This move indicates a strategic shift and a focus on shareholder returns.

Frequently Asked Questions

Northrop Grumman is selling its advisory services business, TASC, Inc., for $1.65 billion in cash.

The company expects to receive approximately $1.1 billion in net cash proceeds after taxes from the sale.

Northrop Grumman intends to use the net proceeds from the sale of TASC, Inc. to repurchase shares of its common stock.

The transaction is expected to close by the end of 2009, contingent upon customary regulatory approvals.

The Board of Directors has increased the share repurchase authorization by $1.1 billion, in addition to the remaining balance of the prior authorization, with the intention of using the TASC sale proceeds for these repurchases.