Borg-Warner finalizes acquisition of Eaton division

CHICAGO (Oct. 4, 1999) — Borg-Warner Automotive finalized the acquisition of Eaton Corp.Õs Fluid Power Division, one of the world’s largest manufacturers of powertrain cooling products, for $310 million US. Borg-Warner Automotive said it expects the transaction to be accretive to earnings, and both companies expect Eaton’s interest in Fluid Power’s Ningbo, China, joint venture to be transferred in the next few weeks.

“The acquisition of this premier technology from Eaton is a great strategic fit for us, offers excellent profitability and provides management depth for us as we grow the business,” said John F. Fiedler, chairman and chief executive officer of Borg-Warner Automotive. “We are now positioned to globalize a modular cooling systems approach across a full range of vehicle types, further serve markets in Europe and developing nations, and enhance our overall growth opportunities in engine-related components and systems.”

Borg-Warner Automotive will combine its existing cooling systems business with that acquired from Eaton to form Borg-Warner Automotive Cooling Systems. John McGill, formerly head of the Eaton division, has been named president and general manager of the new operating group reporting to John Fiedler. Bruce Dufour of Borg-Warner Automotive, has been named senior vice president, sales and marketing.

The Eaton Fluid Power Division, with 1998 sales of approximately $190 million, designs and produces a variety of viscous fan drive cooling systems primarily for passenger vehicles such as light trucks, sport-utility vehicles and vans. Headquartered in Marshall, Mich., it employs 1050 people. The unit has operations in North America and Europe, and an expanding presence in South America and Asia. Major customers include Ford, General Motors/Isuzu and DaimlerChrysler.