Dana Completes Merger with Echlin, Creates Leading Global Automotive Supplier

    TOLEDO, Ohio, July 9 /PRNewswire/ -- Dana Corporation (NYSE: DCN) today
announced the completion of the merger of a subsidiary with Echlin Inc.
(NYSE: ECH), creating one of the world's largest independent companies
supplying components to both automotive original equipment manufacturers and
the aftermarket.
    Valued at approximately $3.9 billion, the transaction is the largest in
the history of the automotive components industry, according to data supplied
by Securities Data Co. and Automotive News.
    As part of the merger, Echlin shareholders will receive 0.9293 of a share
of Dana Common Stock for each share of Echlin they owned on July 9.  Based
upon a closing price of $54.75 per share for Dana on July 8, this represents a
price of $50.88 per share of Echlin.
    The tax-free, stock-for-stock transaction will be accounted for as a
pooling of interests and is expected to be accretive to Dana's earnings per
share in 1999 and beyond.  Dana will issue approximately $3.3 billion of Dana
Common Stock to Echlin shareholders and will assume about $630 million in
Echlin debt.
    Southwood J. Morcott, Dana chairman and chief executive officer said,
"This strategic combination creates a stronger and more balanced Dana with the
resources to be the worldwide leader under the vehicle, under the hood, and in
the aftermarket."
    The combination with Echlin -- which reported sales of $3.6 billion in
1997 -- greatly expands Dana's presence in the global automotive aftermarket
and selected OE segments.  The combined company will be able to offer more
comprehensive product lines to both OE and aftermarket customers worldwide
than either company could achieve individually.
    "Dana plans to leverage its market strengths by capitalizing on Echlin's
premier position in the automotive aftermarket to sell Dana's products,"
Morcott said.  "At the same time, Dana's resources and outstanding customer
relationships will accelerate Echlin's efforts to grow with global original-
equipment customers where Dana already has a leadership position."

    Enhanced Product Line Offered
    With the merger complete, Dana now manufactures products used on more than
95 percent of the world's 600 million motor vehicles.  The merger adds brakes
and fluid-handling systems to Dana's existing core product lineup of axles,
driveshafts, structural products, sealing products, engine products,
filtration products, industrial products, and leasing services.  The merger
also significantly enhances Dana's engine products offering.
    As a result of the merger, Dana has created its seventh strategic business
unit, the Automotive Aftermarket Group, which will focus on service parts and
distribution.
    Morcott also pointed out another benefit, the acquisition of Echlin's
nearly two dozen Quinton Hazell manufacturing and distribution operations in
Europe.  "Quinton Hazell is one of Europe's best-known names for supplying
products to warehouse distributors, jobbers, retailers, and parts producers,"
he said.  "In Quinton Hazell, we gain an important manufacturing-oriented
distribution foothold in Europe, which will help Dana supply its core products
to a variety of customers in the United Kingdom and elsewhere in Europe."

    Synergy Plans Outlined
    Including repositioning plans previously initiated by Echlin, the
combination of Dana and Echlin is expected to generate total pre-tax savings
of $30 million this year, $170 million in 1999, and $340 million in 2000.
    Dana expects synergies from the merger to add approximately $200 million
annually to operating income once integration of the two companies is achieved
in 2000.  1999 pre-tax synergies from the transaction are expected to be
$75 million.  Savings are expected to result from the elimination of duplicate
functions, consolidation of distribution and marketing infrastructure,
improved productivity, and improvements in global sourcing of materials and
components.
    Echlin's Phase I cost-reduction plan, announced last year, is expected to
total $40 million in annualized, pre-tax savings in 1999 and beyond.  The
savings result from a reorganization into core business units, $500 million in
divestitures, implementation of EVA disciplines, facility rationalization, and
people reductions.  Prior to the merger, Echlin had said it expected to
realize about $30 million in synergies from Phase I this year.
    In March, Echlin announced Phase II of its reorganization, which consists
of a series of operational strategies and improvements.  Global sourcing
initiatives will reduce the supply base by 40 percent, realize a 5-percent
cost reduction on $2 billion worth of annual purchases, and coordinate and
centralize purchasing.  This program is expected to achieve pre-tax savings of
$55 million in 1999 and $100 million in 2000.
    These synergies do not include significant potential revenue enhancements
stemming from the two companies' respective strengths.  For example, Dana
intends to capitalize on Echlin's premier position in the aftermarket by
accelerating efforts to grow its customer base in the lucrative and rapidly
expanding international markets.
    "This transaction also strengthens our balance sheet," Morcott said.  "By
the end of 1999, Dana is expected to have debt-to-total capital of about 40
percent.  This positions us well to capitalize on opportunities for future
growth."
    Echlin was founded in San Francisco in 1924 by Jack and Earl Echlin.  The
company expanded its product offering from ignition and fuel system parts to
brake, power transmission, and steering and suspension systems components.  It
also extended its global reach.  Echlin reported annual sales of $3.6 billion
in 1997, making it one of the largest independent replacement parts
manufacturers in the world.
    Founded in 1904 and based in Toledo, Ohio, Dana now operates 270 major
facilities in 33 countries spread over six continents and employs more than
79,000 people.  The pro forma sales of the combined company were
$11.9 billion in 1997.  Dana's Internet address is http://www.dana.com.
    Certain statements contained herein constitute "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act
of 1995.  Such forward-looking statements involve numerous assumptions, known
and unknown risks, uncertainties and other factors which may cause actual and
future performance or achievements of Dana or Echlin, including with respect
to the merger, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.  Such
factors include, among other things, the following: achieving sales levels to
fulfill revenue expectations; the absence of presently unexpected costs or
charges, certain of which may be outside the control of Dana and Echlin; the
cyclical nature of the automotive industry; failure to achieve synergies or
savings anticipated in the merger; general economic and business conditions;
and competition.  Additional factors are detailed in Dana's and Echlin's
public filings with the Securities and Exchange Commission.  Dana disclaims
any responsibility to update any forward-looking statement provided in this
press release.

SOURCE Dana Corporation

Web Site: http://www.dana.com

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