Dana Corporation Signs Letter of Intent to Acquire Full Ownership of Core Operations in Mexico
Nov 22, 2005
TOLEDO, Ohio, Nov. 22, 2005 /PRNewswire-FirstCall/ -- Dana Corporation (NYSE: DCN) announced today that it has signed a letter of intent with DESC S.A. de C.V. under which Dana will acquire full ownership of several core operations based in Mexico. Under terms of the letter, Dana and DESC will dissolve their existing joint venture partnership, Spicer S.A. de C.V., with Dana assuming 100-percent ownership of operations that manufacture and assemble axles and driveshafts, as well as forging and foundry operations in which Dana currently holds an indirect 49-percent interest. DESC, in turn, will assume full ownership of the transmission and aftermarket gasket operations in which it currently holds a 51-percent interest.
The transactions, which are expected to be completed in the first quarter of 2006, are subject to the negotiation and execution of a definitive agreement, approval by Dana's Board of Directors, and customary regulatory approvals.
"These transactions will provide Dana with a strategic opportunity to strengthen our core axle and driveshaft businesses with vertically integrated and technologically advanced operations in a key geographic location," said Dana Chairman and CEO Mike Burns. "As a result, Dana will be positioned to benefit from low-cost manufacturing efficiencies, as well as top-line growth from fully owned core operations in Mexico."
Under the letter, Dana will acquire full ownership of five manufacturing operations, which had combined sales -- both to Dana and to parties other than Dana -- of $290 million (USD) for the trailing 12 months ended Sept. 30, 2005.
The facilities, Autometales, S.A. de C.V.; and Ejes Tractivos, S.A. de C.V. in Mexico City, and Cardanes, S.A. de C.V.; Engranes Conicos, S.A. de C.V.; and Forjas Spicer, S.A. de C.V. in Queretaro, produce light vehicle axle and driveshafts and a variety of related components.
DESC will assume full ownership of Transmisiones y Equipos Mecanicos, S.A. de C.V. (Tremec) and Transmisiones TSP, S.A. de C.V. (TSP) transmissions, located in Queretaro, Mexico; Transmission Technologies Corporation (TTC) with operations in Knoxville, Tenn.; and the T.F. Victor, S.A. de C.V. aftermarket gasket operation in Mexico City, Mexico. Dana will sell aftermarket gaskets in Mexico through T.F. Victor and original equipment gaskets directly to engine and vehicle manufacturers.
About Dana Corporation
Dana people design and manufacture products for every major vehicle producer in the world. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. A leading supplier of axle, driveshaft, engine, frame, chassis, and transmission technologies, Dana employs 46,000 people in 28 countries. Based in Toledo, Ohio, the company reported sales of $9.1 billion in 2004. Dana's Internet address is: http://www.dana.com/.
Statements in this release regarding the anticipated transactions under the letter of intent between Dana and DESC constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent Dana's expectations based on its current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties and there can be no assurance that these transactions will be completed as contemplated. Dana does not undertake to update any forward-looking statements in this release.Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/19990903/DANA
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