TROY, Mich., May 6 /PRNewswire-FirstCall/ -- ArvinMeritor, Inc. (NYSE:
ARM) today announced that its board of directors has approved a plan to
spin off its Light Vehicle Systems (LVS) business to ArvinMeritor
shareholders, with the Commercial Vehicle Systems (CVS) business remaining
with ArvinMeritor.
"The plan to separate our two businesses is the result of a
comprehensive strategic review to enhance the company's long-term value for
our shareholders," said Chip McClure, chairman, CEO and president. "We are
confident that this transaction will not only unlock shareholder value, but
will also significantly strengthen the competitive positions of both
companies and better align them with their respective customer bases.
"Each company will benefit from a greater strategic focus on its core
business and growth opportunities as well as from increased recognition in
each of its global market segments. In addition, the separate companies
will offer more attractive and targeted investment opportunities, with
incentives for management and employees that are more closely aligned with
company performance and shareholder interests," continued McClure.
The planned spinoff of the LVS business -- to be named Arvin
Innovation, Inc. -- would be implemented through a pro rata tax-free
dividend to ArvinMeritor shareholders. Upon completion of the spinoff,
ArvinMeritor shareholders will own 100 percent of the common stock of Arvin
Innovation. Approval of the spinoff by ArvinMeritor shareholders is not
required, and the company expects to complete the spinoff within the next
12 months, contingent upon satisfactory financial and automotive market
conditions as well as other customary approvals.
"Our decision to spin off the LVS business is part of the company's
ongoing corporate transformation -- our 3R strategy to rationalize, refocus
and regenerate -- that has been underway for the last three years," McClure
said. "Separating these two businesses and successfully implementing our
Performance Plus initiatives are major steps in the transformation to build
two stronger, more competitive companies for the future.
"Our LVS business group will have the right leadership team, a solid
financial structure, market-leading positions in many of its product lines,
a well-diversified customer mix and the global reach to grow this new
company as a market leader going forward," McClure concluded.
McClure will remain as ArvinMeritor's chairman, CEO and president.
James Marley, currently a board member of ArvinMeritor, will lead Arvin
Innovation's board of directors as non-executive chairman. Until the spin
is completed, Marley, a retired chairman of the board of AMP Inc., will
remain on the ArvinMeritor board. Phil Martens, currently ArvinMeritor's
senior vice president and president, Light Vehicle Systems, will become the
president and CEO of Arvin Innovation.
"As a separate independent unit, Arvin Innovation will be better
positioned to drive specific growth initiatives, including improving our
customer focus and expanding our global presence," said Martens. "With
increased flexibility as a stand-alone business, Arvin Innovation will have
an excellent opportunity to create next-generation systems technology
solutions for our customers around the world. In addition, we look forward
to the many new and enhanced opportunities the new organization will
provide for our worldwide employees."
Jim Donlon, executive vice president and CFO of ArvinMeritor will
immediately begin supporting ArvinMeritor's LVS business group in the
capacity of chief financial officer as it prepares to become an independent
company. Upon completion of the spin, he will become executive vice
president and CFO of Arvin Innovation.
Jay Craig, senior vice president and controller, will replace Donlon as
ArvinMeritor's senior vice president and CFO, effective immediately.
Rakesh Sachdev, senior vice president of ArvinMeritor and president of
Asia Pacific, will become executive vice president, chief administrative
officer and managing director of Emerging Markets of the new company, upon
the completion of the spin. However, until a successor is named, he will
continue to be responsible for ArvinMeritor's Asia Pacific region.
When the spinoff is completed, Carsten Reinhardt, senior vice president
of ArvinMeritor and president of the company's Commercial Vehicle Systems
business, will be named COO for ArvinMeritor.
In addition, Mary Lehmann, currently the company's senior vice
president, Strategic Initiatives, and Treasurer, will expand her
responsibilities to include Information Services, M&A activities, and
Investor Relations. Vernon Baker, currently senior vice president and
general counsel, with overall legal responsibility for all of
ArvinMeritor's global operations and its subsidiaries, and Environmental,
Health and Safety, will also assume responsibility for the global Human
Resources organization.
ArvinMeritor will remain headquartered in Troy, Mich. Arvin Innovation
will be headquartered in Detroit, Mich., at the current location of the LVS
Detroit Technology Center, with other corporate offices located in Europe,
Asia Pacific and South America.
The spinoff is subject to customary conditions, including final
approval by ArvinMeritor's board of directors; completion of all required
activities with employee representatives; receipt of applicable consents;
effectiveness of a registration statement with the Securities and Exchange
Commission; receipt of a tax ruling from the IRS; and the approval of
applicable regulatory authorities.
ArvinMeritor's common stock will continue to trade on the New York
Stock Exchange under the symbol ARM. We have applied for Arvin Innovation
to be listed on the NASDAQ global stock market under the symbol ARVI.
Until the spinoff is effective, ArvinMeritor's management intends to
recommend that its board continue its current dividend policy.
J.P. Morgan Securities Inc. is ArvinMeritor's lead financial advisor
for this transaction. UBS Securities is also advising ArvinMeritor on
financial matters relating to the transaction. Chadbourne & Parke LLP as
well as Miller, Canfield, Paddock and Stone, P.L.C. are acting as
ArvinMeritor's legal advisors.
Light Vehicle Systems
ArvinMeritor's LVS business is a leading global provider of dynamic
motion and control automotive systems and components, with sales of $2.2
billion in 2007 -- $2.0 billion of value-added sales and $200 million of
pass-through sales. Of the value-added sales, more than 60 percent were
outside North America. ArvinMeritor's LVS business group is a market leader
in many of the product categories it serves, supplying components and
integrated systems and modules to the world's leading passenger car and
light truck OEMs.
Through smart systems(TM) technologies, the intelligent application of
controls and electronics, LVS' traditional mechanical products are taking
on new form and function at both the component and system levels. With
advanced technology and systems design expertise -- in body systems (roof,
and door modules and systems, motors, latches, window regulators, and
electronic controls); and chassis systems (chassis and suspension modules
and systems, ride control products, electronic chassis control systems,
global aftermarket chassis products and wheels) -- LVS produces integrated,
high-quality, cost-effective performance-based solutions for practically
all car and light truck market segments.
The business will have approximately 9,000 employees with 42 facilities
in 16 countries. LVS has interests in eight joint ventures (three
consolidated and five non-consolidated).
Commercial Vehicle Systems
Upon completion of the spinoff, ArvinMeritor will continue as a market
leader in the commercial vehicle systems business. ArvinMeritor's
commercial vehicle business is a leading supplier of drivetrain components
and systems, including axles and drivelines, braking systems, suspension
systems and ride control products for heavy- and medium-duty trucks,
trailers, buses, off-highway and military vehicles as well as to the
commercial vehicle aftermarket.
The CVS business will have 62 global locations, including manufacturing
facilities, technical centers, warehouses and administrative offices. CVS
has approximately 10,000 employees in 15 countries. In 2007, the CVS
business recorded sales of more than $4.2 billion. CVS has interests in
eleven joint ventures (five consolidated and six non-consolidated).
Call-In Detail
ArvinMeritor will host a conference call and Web cast on Tuesday, May
6, 2008, at 8 a.m. (ET). To participate, call (617) 213-4847, ten minutes
prior to the start of the call. Please reference Passcode 30588392 when
dialing in.
Investors and media can also listen to the conference call for seven
days by recording by visiting http://www.arvinmeritor.com. A replay of the call
will be available from 10:00 a.m. Tuesday, May 6 until 11:59 p.m. Tuesday,
May 13 by calling (888) 286-8010 within the United States and Canada, or
(617) 801-6888 international callers. Please reference Passcode 54756165.
To access the listen-only audio Web cast, visit the ArvinMeritor Web
site at http://www.arvinmeritor.com and select the Web cast link from the home
page or the investor page.
About ArvinMeritor
Today, ArvinMeritor, Inc. is a premier global supplier of a broad range
of integrated systems, modules and components to the motor vehicle
industry. The company serves commercial truck, trailer and specialty
original equipment manufacturers and certain aftermarkets, and light
vehicle manufacturers. Headquartered in Troy, Mich., ArvinMeritor employs
approximately 19,000 people in 24 countries. ArvinMeritor common stock is
traded on the New York Stock Exchange under the ticker symbol ARM. For more
information, and high resolution photography, visit the company's Web site
at: http://www.arvinmeritor.com/.
Forward-Looking Statements
This press release contains statements relating to future results of
the company (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are typically
identified by words or phrases such as "believe," "expect," "anticipate,"
"estimate," "should," "are likely to be," "will" and similar expressions.
There are risks and uncertainties relating to the planned spin-off of
ArvinMeritor's LVS business, including the timing and certainty of
completion of the transition. In addition, actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including but not limited to global economic and market
cycles and conditions; the demand for commercial, specialty and light
vehicles for which the company supplies products; risks inherent in
operating abroad (including foreign currency exchange rates and potential
disruption of production and supply due to terrorist attacks or acts of
aggression); availability and sharply rising cost of raw materials,
including steel and oil; OEM program delays; demand for and market
acceptance of new and existing products; successful development of new
products; reliance on major OEM customers; labor relations of the company,
its suppliers and customers, including potential disruptions in supply of
parts to our facilities or demand for our products due to work stoppages;
the financial condition of the company's suppliers and customers, including
potential bankruptcies; possible adverse effects of any future suspension
of normal trade credit terms by our suppliers; potential difficulties
competing with companies that have avoided their existing contracts in
bankruptcy and reorganization proceedings; successful integration of
acquired or merged businesses; the ability to achieve the expected annual
savings and synergies from past and future business combinations and the
ability to achieve the expected benefits of restructuring actions; success
and timing of potential divestitures; potential impairment of long-lived
assets, including goodwill; potential adjustment of the value of deferred
tax assets; competitive product and pricing pressures; the amount of the
company's debt; the ability of the company to continue to comply with
covenants in its financing agreements; the ability of the company to access
capital markets; credit ratings of the company's debt; the outcome of
existing and any future legal proceedings, including any litigation with
respect to environmental or asbestos-related matters; the outcome of actual
and potential product liability and warranty and recall claims; rising
costs of pension and other post-retirement benefits and possible changes in
pension and other accounting rules; as well as other risks and
uncertainties, including but not limited to those detailed from time to
time in filings of the company with the SEC. These forward-looking
statements are made only as of the date hereof, and the company undertakes
no obligation to update or revise the forward-looking statements, whether
as a result of new information, future events or otherwise, except as
otherwise required by law.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO )
SOURCE ArvinMeritor, Inc.
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Related links:
http://www.arvinmeritor.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20010524/ARVINLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media, Lin Cummins, +1-248-435-7112,
linda.cummins@arvinmeritor.com; Light Vehicle Systems, Kim Adler,
+1-248-435-1981, kimberly.adler@arvinmeritor.com; Investor
Relations, Terry Huch, +1-248-435-9426,
terry.huch@arvinmeritor.com
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