TROY, Mich. — ArvinMeritor said yesterday it has reached agreements to divest its entire ownership stake in two joint ventures in its light vehicle chassis business. Together, these transactions will result in the divestiture of 45 percent of the Chassis Systems business (as measured by 2008 sales).
In January, ArvinMeritor issued an update on its reorganization plans and possible spin-off of its Light Vehicle Systems (LVS) unit. At the time, the company said it would reorganize its LVS business group to include three divisions – body systems, chassis systems and wheels, with plans to retain the Wheels business and explore the sale of the body systems business. In the update, ArvinMeritor said it would also explore strategic alternatives for a “timely and orderly exit” from the chassis systems business.
The company has entered into a binding letter of intent to sell its 57 percent stake in Meritor Suspension Systems Co. ("MSSC"), a joint venture that manufactures and sells automotive coil springs, torsion bars and stabilizer bars in North America. The share will be sold to its joint venture partner, a subsidiary of Mitsubishi Steel Mfg. Co., LTD (MSM). The transaction is expected to close in the coming months, after receiving necessary regulatory clearances.
Earlier this month, ArvinMeritor also announced that it completed the sale of its 51 percent stake in Gabriel de Venezuela, which manufactures shock absorbers, struts, exhaust systems and suspension modules for countries including Venezuela, Colombia, Chile, Bolivia, Peru and Ecuador.
"We are pleased to announce these two divestitures, which represent important steps toward achieving our long-term strategic objective to focus on supplying the commercial vehicle on- and off-highway markets for both original equipment manufacturers and aftermarket customers," said Chip McClure, chairman, CEO and president. "Our joint venture partners are strong companies and I am confident that they will focus on growing these businesses. We continue to concentrate on divesting the light vehicle Chassis business, and we are pleased with the high level of interest we are continuing to see from potential buyers in the remaining segments of that business."
