British defense contractor

BAE Systems

confirmed on Monday that is in talks with

TRW

(TRW)

.

"This situation may offer an opportunity to expand further BAE Systems' defense activity in North America. The company has therefore established a dialogue with TRW," the company said in a statement.

Northrop Grumman

(NOC) - Get Report

has already made a $6.7 billion tender offer to buy TRW. The company rejected the bid, which was upped from an earlier price. But TRW's has agreed to open its books to Northrop.

In recent trading, TRW was up 0.8%, at $54.39, while Northrop was down 0.6% at $116.99.