Dana to Sell European Warehouse Distribution; Rationalize Engine Operations in France
Feb 27, 1997
TOLEDO, Ohio, Feb. 27 /PRNewswire/ -- Dana Corporation (NYSE: DCN) has signed an agreement to sell its warehouse distribution operations in the U.K., the Netherlands and Portugal, and initiated a rationalization plan at its Perfect Circle Europe operations in France. In the largest divestiture in company history, Dana has agreed to sell its European warehouse distribution operations to U.K.-based Partco Group plc for 103 million pounds (U.S. $168 million). The 1996 sales of these operations were $315 million. The closing, subject to the approval of Partco's shareholders, is anticipated by the end of March. The sale will result in an after-tax gain of approximately $47 million to Dana (46 cents per share). A substantial portion of the gain from the sale of the U.K. warehouse distribution operations will be offset by the costs of restructuring Perfect Circle Europe. When the restructuring plans have been finalized, Dana expects the resulting charges of approximately $36 million (35 cents per share) to be recognized during the first and second quarters of 1997. "This transaction will benefit both Dana and the operations it is divesting," said Dana Chairman Southwood J. Morcott. "Although we will continue to distribute our manufactured products in the global aftermarket, Dana is primarily a vehicular components manufacturing company and not a warehouse distributor. This transaction will allow us to focus our resources on maximizing growth opportunities in our core businesses -- axles; driveshafts; gaskets; filters; structural, engine and off-highway components; industrial products and leasing services -- to increase shareholder value." Added Morcott, "At the same time, the transaction will provide the warehouse distribution operations with a complementary partner that is dedicated to growing and developing their warehouse distribution operations and their people. We believe this transaction will be in the best interest of the people in these distribution operations." The operations included in the sale encompass 135 Brown Brothers distribution facilities in the United Kingdom, Dana Distribution B.V. (Holland), Tece Almere (Holland), and Europecas S.A. (Portugal). In another strategic move, Dana has initiated a rationalization plan at its Perfect Circle Europe operations in France (formerly known as Floquet Monopole). Dana plans to sell its Liancourt piston manufacturing facility, to reorganize its Dreux piston ring machining operation, and to downsize and relocate its Poissy division office. "Exiting the piston business and streamlining its piston ring manufacturing operations will enhance Perfect Circle Europe's competitive position," Morcott said, adding that Dana currently has no U.S.-based piston manufacturing operations. Dana Corporation is a global leader in the engineering, manufacture and distribution of products and systems for the vehicular, industrial and off-highway markets. Its core businesses are axles, driveshafts, structural components (frames), sealing products, filtration products, engine products, industrial products, off-highway components and leasing. Its leasing services operation was a recipient of the 1996 Malcolm Baldrige National Quality Award. Founded in 1904 and based in Toledo, Ohio, Dana operates facilities in 30 countries with more than 48,000 people. Its 1996 sales were $7.7 billion. It has more than 40 product research and development centers worldwide. The Internet address for Dana's home page is: http://www.dana.com. SOURCE Dana Corporation CONTACT: Gary Corrigan, Director-Corporate Communications, of Dana Corporation, 419-535-4813