Dana Corporation Announces Agreement to Sell Non-Core Engine Hard Parts Business
Dec 4, 2006
TOLEDO, Ohio – December 4, 2006 – Dana Corporation (OTCBB: DCNAQ) announced that today it has entered into a stock and asset purchase agreement with MAHLE GmbH, a leading supplier to the automotive and engine industries, for the sale of Dana’s non-core engine hard parts business.
The agreement provides for MAHLE and certain of its affiliates to acquire the equity and tangible and intangible assets of the global operations comprising Dana’s engine hard parts business from Dana and certain of its affiliates for an aggregate price of approximately $157 million. The price includes approximately $98 million in cash, subject to usual adjustments at closing, and the buyers' assumption of certain liabilities related to the business. In connection with the transaction, the parties will also enter into ancillary agreements, including a transition services agreement and a distribution agreement relating to Victor Reinz® branded products.
Closing of the transaction is subject to the approval of the United States Bankruptcy Court for the Southern District of New York, which has jurisdiction over Dana’s Chapter 11 reorganization proceedings; government regulatory approvals; and customary closing conditions.
As a standard element of the bankruptcy process, Dana has filed a motion with the Bankruptcy Court seeking approval of procedures that will provide an opportunity for competitive bids on the engine hard parts business before the sale is approved by the Court. Dana expects to complete the bidding process and to secure the regulatory approvals in time to close the sale in the first quarter of 2007.
The engine hard parts business consists of 39 facilities which manufacture piston rings, engine bearings, cylinder liners, and camshafts under the Perfect Circle, Clevite, and Glacier Vandervell brands. With annual revenues of approximately $670 million in 2005, the operations to be divested employ approximately 5,000 people in 10 countries. Dana announced its intention to sell its engine hard parts business in late 2005.
Dana Chairman and CEO Mike Burns said, “This divestiture is an important step in implementing Dana's reorganization initiatives and sharpening our focus on our core axle, driveshaft, structural, sealing, and thermal products businesses for the automotive, commercial vehicle, and off-highway markets.