Dana To Sell Trailer Axle Business

Posted on September 11, 2006

Dana Corp. said that it and two affiliates have entered into asset purchase agreements with Hendrickson USA, L.L.C., for the sale of Dana’s trailer axle manufacturing business. Under terms of the agreements, Hendrickson and its affiliates will acquire certain assets located in Lugoff, S.C., Barrie, Ontario, Canada, and Wuxi, China. All of those sites are used to manufacture heavy-duty trailer axles and suspensions. Hendrickson will acquire the businesses for an aggregate price of approximately $38 million in cash and will also assume limited liabilities related to the business.

The transactions are subject to the approval of the U.S. Bankruptcy Court for the Southern District of New York, which has jurisdiction over Dana’s Chapter 11 reorganization proceedings. As a standard part of the divestiture process, Dana has filed a motion with the Bankruptcy Court seeking approval of procedures that will provide an opportunity for competitive bids on the trailer axle assets before the sale is approved by the Court. Dana expects the bidding process to be completed and the sale to close in the fourth quarter of 2006.

Dana Heavy Vehicle Products President Nick Stanage said the asset sale will support the company’s efforts to focus more intently on its core commercial vehicle drivetrain product lines. “This divestiture will benefit our Commercial Vehicle group by concentrating its resources on our core products and competencies – namely drive and steer axles, driveshafts, brakes and tire inflation systems for commercial vehicles,” he said.

In conjunction with the asset purchase agreements, Bendix Spicer Foundation Brake LLC, a joint venture in which Dana has an interest, has agreed to continue to supply Bendix brake systems to Hendrickson.