DOW JONES NEWSWIRES
Mexican auto-parts maker Metalsa S.A. de C.V. has agreed to buy
Dana Holding Corp.'s (DAN) structural products business for up to
$150 million plus assumption of some liabilities.
The operations and assets to be sold generated revenue of about
$695 million in 2008, nearly 10% of Dana's total. The company
expects to recognize a pretax loss of $150 million to $180 million,
mostly in the fourth quarter, on write-downs.
The sale "enables Dana to sharpen our focus and resources more
squarely on our axle, driveshaft, sealing and thermal products
businesses," said President and Chief Executive Jim Sweetnam.
The deal calls for Metalsa, a subsidiary of privately held Grupo
Proeza, to pay $130 million at closing, $5 million more one year
later and up to $15 million subject to an earn-out. About 10% of
the $130 million will be held in escrow to support Dana's
indemnification obligations to Metalsa.
Under the agreement, Metalsa will assume control of 10 Dana
manufacturing plants that produce structural components for chassis
and body structures in light and commercial vehicles. The plants
are in the U.S., Argentina, Australia, Brazil and Venezuela and
employ some 2,800 workers. Metalsa's work force will grow some 78%
as a result.
Dana, which has about 23,000 employees, will continue to operate
its structural products operations in Longview, Texas.
The deal also includes Dana's interest in its Chassis Systems
Ltd. joint venture in the U.K. with GKN PLC (GKNLY, GKN.LN).
Dana, which makes axles, driveshafts and thermal-management
products recently reported better-than-expected third-quarter
results. It has also been active in cutting debt levels.
Dana's shares closed Wednesday at $9.40 and were inactive after
hours. The stock has soared tenfold this year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com