STUTTGART, Germany — The MAHLE Group, headquartered in Stuttgart, Germany has entered into a stock and asset purchase agreement with Dana Corp. for the acquisition of Dana’s engine hard parts business.
The MAHLE Group is a global manufacturer of components and systems for the combustion engine and engine peripherals.
The agreement includes the acquisition of all worldwide units of Dana’s engine hard parts business by MAHLE, including the Clevite aftermarket organization. In connection with the transaction, the parties will enter into ancillary agreements including an agreement granting MAHLE exclusive distribution rights to Dana’s retained Victor Reinz branded products in the independent aftermarket in the U.S. and Canada.
Dana’s engine hard parts business consists of 39 locations in 10 countries with approximately 5,000 employees. The business had sales of approximately $670 million in 2005. The engine hard parts business makes piston rings, engine bearings, cylinder liners and camshafts sold under the Perfect Circle, Clevite and Glacier Vandervell brands.
Since Dana Corp. is currently in Chapter 11, closing of the transaction is subject to the approval of the Bankruptcy Court. As a standard part of the bankruptcy process, Dana will allow other parties to make competitive bids for the engine hard parts business and there may be an auction at which Dana, MAHLE and any such other bidders will participate. Closing of the transaction is also subject to government regulatory approvals and customary closing conditions. It is anticipated the conditions to closing, including Bankruptcy Court approval, will be satisfied in time to close the transaction in the 1st Quarter 2007.
Commenting on the acquisition Dr. Heinz Junker, CEO of MAHLE Group Management Board, said, "The acquisition of Dana’s engine hard parts business would complement our worldwide market position particularly in the areas of piston rings and engine bearings, as well as in the aftermarket for engine parts. As Dana Corporation has not considered the engine hard parts business as one of its core business segments for some time, it will be a major task to integrate the Dana locations into the existing MAHLE production network by appropriate restructuring measures, in order to facilitate all necessary synergy effects for the future."