ArvinMeritor Ends Bid for Dana Corporation

In a surprise move, ArvinMeritor withdrew its bid to take over Dana Corp. Sunday.
After a fervent bid to take over rival Dana Corp., rival automotive parts manufacturer ArvinMeritor Inc. withdrew its latest offer, saying its 4-month battle to acquire the larger company was over.
According to a report in the Detroit Free Press, Troy, Michigan-based ArvinMeritor said it scratched its offer after Dana’s board of directors unanimously rejected the supplier’s recently increased offer of $18 U.S. per share. ArvinMeritor had planned to withdraw its offer on Dec. 2 unless Dana’s board agreed to start negotiating, so the move comes more than a week earlier.
An ArvinMeritor spokeswoman said the latest rejection prompted the company to withdraw its offer early.
“They responded . . . and we had to respond back,” said ArvinMeritor spokeswoman Lin Cummins of Sunday’s rejection. “We decided to let it go because it was taking too many resources.”
Toldeo, Ohio-based Dana Corp. said it sent a letter to ArvinMeritor chief executive Larry Yost informing him of the decision and approved another letter to shareholders explaining the decision.
“The value being offered by ArvinMeritor–even if it were obtainable–is neither attractive nor compelling,” the Dana letter said.
In a statement, Yost said the company was disappointed the Dana board was unwilling to negotiate and that the decision would “deprive Dana’s shareholders of the immediate and substantial value.”
ArvinMeritor had increased its offer to $18 a share on Nov. 17 after Dana had rejected its previous bid of $15 a share. The previous offer, extended in October, had been set to expire Dec.1.
ArvinMeritor offered $2.2 billion U.S. for Dana in July after Dana rejected several requests for meetings to discuss an acquisition. At the time, the takeover bid was one of the 10 largest in the history of the auto-supply industry. The projected savings from the combination would have been roughly $200 million annually, ArvinMeritor said.