Borg-Warner to buy Eaton Corp.’s fluid power division

CLEVELAND, Ohio (Aug. 4, 1999) — Borg-Warner Automotive plans to buy the Fluid Power Division of Eaton Corp., one of the world’s leading manufacturers of powertrain cooling systems for cars, for $310 million US.

Borg-Warner said the deal would expand its own cooling systems business into light vehicles, position the business for growth in Europe and developing nations, and further enhance overall growth opportunities in engine-related components and systems.

Earlier this year, Borg-Warner acquired the commercial cooling systems business acquired from Kuhlman Corp.

The transaction, expected to close in the second half of 1999 following a regulatory review, would be accretive to earnings, Borg-Warner said. Eaton’s Fluid Power Division has annual revenues of $190 million.

Engine technology is currently the fastest growing segment of Borg-Warner’s business and will account for over 50% of revenues when the purchase is completed.

“As with all our engine technology, innovations and changes in cooling system designs are driven by the need to help our customers meet increasing stringent global fuel and emission standards,” said John F. Fiedler, chairman and CEO of Borg-Warner. “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.”

The Eaton Fluid Power Division, headquartered in Marshall, Mich., employs 1050 people. Major customers include Ford, General Motors/Isuzu and DaimlerChrysler.