ArvinMeritor Ups Ante for Dana Bid

ArvinMeritor Inc., looking to eliminate a big stumbling block in its $2.2 billion U.S. hostile bid for rival Dana Corp., has offered to divest itself of some of Dana’s truck-parts business in order to win antitrust approval for the deal, people familiar with the situation told The Wall Street Journal.
ArvinMeritor has submitted its offer to the Federal Trade Commission, which has indicated that the proposed combination raises significant antitrust issues.
A spokeswoman for ArvinMeritor couldn’t be reached for comment.
A Dana spokesman confirmed that it has been responding to FTC inquiries about an ArvinMeritor proposal, saying the antitrust issues raised by the ArvinMeritor offer are serious and of critical importance. Dana, Toledo, Ohio, also contends that a restructuring offers better value for its shareholders than the ArvinMeritor bid, valued at $15 a share.
The deal proposed by ArvinMeritor, Troy, Mich., would create the third-largest U.S. auto supplier, behind Delphi Corp. and Visteon Corp., and would be the latest in a long wave of consolidation in the fragmented auto-parts sector.
ArvinMeritor is offering to divest itself of Dana’s medium- and heavy-duty axle-and-brake business, as well as Dana’s driveline business, say people familiar with the situation. ArvinMeritor is a big player in truck parts, prompting industry analysts to say the proposed combination of the two companies would likely raise significant antitrust concerns in the commercial-vehicle business, particularly brakes and axles.
Shares of Dana were up 20 cents at $15.90 a share in 4 p.m. composite trading Friday on the New York Stock Exchange. ArvinMeritor was down 11 cents at $16.74, also on the NYSE.