Bid Reported Near for TRW Auto Unit

TRW Inc. is in advanced discussions to sell its automotive-parts business to two major private-equity firms for about $5 billion in what would be the final transaction in its complex and lengthy auction, said people familiar with the matter.

The negotiations with Blackstone Group and Carlyle Group are fluid, but a transaction could be reached as soon as this week, these people said.

A sale of the auto business would be a boon for Los Angeles-based Northrop Grumman Corp., which agreed to buy TRW in July for $7.8 billion in stock. Northrop had said it would divest itself of the auto business, TRW’s largest unit, immediately after completing the acquisition.

Although its bid was for all of TRW, Northrop was interested only in TRW’s space and military assets. Before it reached the deal with Northrop, TRW also agreed to sell its aeronautics business to Goodrich Corp. for $1.5 billion.

Spokesmen for Blackstone and Carlyle declined to comment on the situation, reported in the Financial Times newspaper. Spokesmen for TRW and Northrop also declined to comment.

Proceeds of both sales could be used to significantly pare TRW’s more than $5 billion in debt, associated mainly with the auto operation. The unit, which makes air bags and brake equipment, has suffered in recent years due to increased competition and a lagging economy in the U.S.