Dana comments on antitrust probe

TOLEDO, Ohio (Sept. 11, 2003) — Dana Corp. issued a statement this week maintaining there are “serious antitrust issues” in ArvinMeritor’s unsolicited tender offer to acquire Dana.

ArvinMeritor made a proposal directly to Dana shareholders earlier this summer for $15.00 per share in cash. At the time, ArvinMeritor stated it 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 rejected the company’s prior proposals and refused requests to enter into discussions.

The statement was released in connection with a Federal Trade Commission (FTC) request for additional information from ArvinMeritor and Dana relating to the unsolicited offer. The “second request” from the FTC seeks information regarding a dozen product areas where there is material competitive overlap between ArvinMeritor and Dana.

“From the outset, we said that ArvinMeritor’s tender offer raises serious antitrust issues and was likely to attract intensive scrutiny from government regulatory authorities,” said Dana Chairman and CEO Joe Magliochetti. “Dana and ArvinMeritor are currently the only substantial North American producers of axles, driveshafts, and foundation brakes for medium- and heavy-duty trucks, with combined market shares ranging from 80 to 100 per cent.

“ArvinMeritor has recently spoken of the potential for significant divestitures of the combined company’s commercial vehicle axle assets and other businesses in response to regulatory concerns. Even if deemed acceptable by the FTC, these actions would appear to limit opportunities for synergies and would result in a very different company from the one proposed in ArvinMeritor’s offer,” Magliochetti said. “Based on this and many other factors, our shareholders are understandably questioning the strategic logic, as well as the financial logic, of the offer.”

Meanwhile, ArvinMeritor announced it has received a request for additional information from the FTC. The company said it will continue to work with the FTC with respect to the filing. The company noted that the request is not unusual for transactions of this kind and that the scope of the request was as expected.

— Truckinginfo.com