TOLEDO, Ohio (Dec. 6 ) — Dana Corp., which is in Chapter 11 bankruptcy reorganization, has entered into a stock and asset purchase agreement to sell its non-core engine hard parts business for an aggregate price of approximately $157 million to Mahle GmbH, a worldwide supplier to the automotive and engine industries.
The agreement provides for Mahle and certain of its affiliates to acquire the equity and tangible and intangible assets of the global operations comprising the engine hard parts business from Dana and some of its affiliates. 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, Dana said.
In connection with the transaction, Dana added that the parties also will 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 U.S. 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.
Dana said that as a standard element of the bankruptcy process, it 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 announced its intention to sell its engine hard parts business in late 2005. The company said it 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 company's engine hard parts business consists of 39 facilities that make piston rings, engine bearings, cylinder liners and camshafts under the Perfect Circle, Clevite and Glacier Vandervell brands. The operation had annual revenues of about $670 million in 2005 and employs approximately 5,000 in 10 countries.
Dana Chairman and CEO Mike Burns called the divestiture "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."