Dana Corporation Announces Intention To Divest Aftermarket Group

In a move to sharpen Dana Corporation’s focus on the original equipment marketplace, the company announced that it intends to divest the company’s Automotive Aftermarket Group.
The board of directors stated that the key benefit of this action is the enhanced strategic focus it will bring to the company.
The announcement comes less than a week after a continually rebuffed ArvinMeritor called off its agressive takeover attempts.Commenting on the announcement, Dana’s acting president and chief operating officer Bill Carroll said, “This move will enable us to leverage our historic strengths in product and process technology to the benefit of our OE customers – and ultimately, our shareholders.”
Dana’s Automotive Aftermarket Group produces and markets a broad line of replacement products, including Raybestos brakes, Wix filters, and a variety of under-vehicle components. The group, which employs more than 15,000 people worldwide, reported sales of approximately $2.2 billion U.S. in 2002.
The proposed divestiture does not involve Dana’s Clevite distribution and marketing activities based in Ann Arbor, Mich., or its related operations in Churubusco, Ind.; Collierville, Tenn.; and Olive Branch, Miss.
“As the largest manufacturer of replacement parts and components in the aftermarket sector, our Automotive Aftermarket Group features some of the world’s leading under-hood and under-vehicle brands,” Mr. Carroll added.
“This business has been made even stronger by our restructuring efforts over the past two years, which have included a renewed focus on our customers and have enhanced our efficiency, quality, and service. Ultimately, we believe the Aftermarket Group’s future opportunities will be optimized under new ownership that is principally dedicated to the automotive aftermarket.
“At the same time, we believe Dana will be best served as we dedicate our resources to providing innovative systems solutions to the light vehicle, commercial vehicle, and off-highway markets,” he said.
Mr. Carroll said that possible uses of proceeds from a sale include reinvestment in the company’s core businesses; the further reduction of Dana’s debt, which would likely accelerate the company’s return to investment-grade status; and a contribution to the company’s pension plans.
“We believe this action will significantly enhance Dana’s strategic and financial flexibility, while adding value for our shareholders,” Mr. Carroll said.