ArvinMeritor halts takeover bid for Dana

TROY, Mich. (Nov. 24, 2003) — Dana Corp.’s board has unanimously rejected ArvinMeritor’s most recent offer for the company, and effectively ending ArvinMeritor’s $2.67 billion takeover bid.

ArvinMeritor announced it planned to terminate its latest offer of $18 a share — up from its first offer in July of $15 — unless Dana’s board agreed to begin negotiating a merger agreement.

ArvinMeritor has ignored Dana’s opposition to the offer since it tendered its original offer this summer to acquire all of Dana’s outstanding shares. Larry Yost, chairman and CEO of ArvinMeritor, stated at the time he would have preferred to meet with the Dana Board and its advisors to discuss an all-cash offer and negotiate a mutually acceptable transaction. “However, Dana has rejected our prior proposals and refused our requests to enter into discussions,” he said. “Therefore, we believe it is necessary to take our offer directly to Dana’s shareowners.”

In a letter to ArvinMeritor, Dana said its decision is based on the belief that “the value being offered by ArvinMeritor – even if it were obtainable – is neither attractive nor compelling.” Dana has commented several times it doesn’t believe in ArvinMeritor’s ability to afford its own offer.

Dana has also said the Federal Trade Commission’s request for more information about the takeover highlighted antitrust concerns. Considerable overlap exists in the two rival companies’ product lines, including medium and heavy-duty axles, axle components, disc brakes, driveshafts and filters. ArvinMeritor said the FTC request was routine.

“We are disappointed that the Dana board is unwilling to sit down with us and has chosen instead to deprive Dana’s shareowners of the immediate and substantial value,” ArvinMeritor said in a statement. “As we have previously stated, this was our final offer.”

— with files from Associated Press