TROY, Mich., May 6 /PRNewswire-FirstCall/ -- ArvinMeritor, Inc.
(NYSE: ARM) today announced that its board of directors has approved a plan to
spin off its Light Vehicle Systems (LVS) business to ArvinMeritor
shareholders, with the Commercial Vehicle Systems (CVS) business remaining
"The plan to separate our two businesses is the result of a comprehensive
strategic review to enhance the company's long-term value for our
shareholders," said Chip McClure, chairman, CEO and president. "We are
confident that this transaction will not only unlock shareholder value, but
will also significantly strengthen the competitive positions of both companies
and better align them with their respective customer bases.
"Each company will benefit from a greater strategic focus on its core
business and growth opportunities as well as from increased recognition in
each of its global market segments. In addition, the separate companies will
offer more attractive and targeted investment opportunities, with incentives
for management and employees that are more closely aligned with company
performance and shareholder interests," continued McClure.
The planned spinoff of the LVS business -- to be named Arvin Innovation,
Inc. -- would be implemented through a pro rata tax-free dividend to
ArvinMeritor shareholders. Upon completion of the spinoff, ArvinMeritor
shareholders will own 100 percent of the common stock of Arvin Innovation.
Approval of the spinoff by ArvinMeritor shareholders is not required, and the
company expects to complete the spinoff within the next 12 months, contingent
upon satisfactory financial and automotive market conditions as well as other
"Our decision to spin off the LVS business is part of the company's
ongoing corporate transformation -- our 3R strategy to rationalize, refocus
and regenerate -- that has been underway for the last three years," McClure
said. "Separating these two businesses and successfully implementing our
Performance Plus initiatives are major steps in the transformation to build
two stronger, more competitive companies for the future.
"Our LVS business group will have the right leadership team, a solid
financial structure, market-leading positions in many of its product lines, a
well-diversified customer mix and the global reach to grow this new company as
a market leader going forward," McClure concluded.
McClure will remain as ArvinMeritor's chairman, CEO and president. James
Marley, currently a board member of ArvinMeritor, will lead Arvin Innovation's
board of directors as non-executive chairman. Until the spin is completed,
Marley, a retired chairman of the board of AMP Inc., will remain on the
ArvinMeritor board. Phil Martens, currently ArvinMeritor's senior vice
president and president, Light Vehicle Systems, will become the president and
CEO of Arvin Innovation.
"As a separate independent unit, Arvin Innovation will be better
positioned to drive specific growth initiatives, including improving our
customer focus and expanding our global presence," said Martens. "With
increased flexibility as a stand-alone business, Arvin Innovation will have an
excellent opportunity to create next-generation systems technology solutions
for our customers around the world. In addition, we look forward to the many
new and enhanced opportunities the new organization will provide for our
Jim Donlon, executive vice president and CFO of ArvinMeritor will
immediately begin supporting ArvinMeritor's LVS business group in the capacity
of chief financial officer as it prepares to become an independent company.
Upon completion of the spin, he will become executive vice president and CFO
of Arvin Innovation.
Jay Craig, senior vice president and controller, will replace Donlon as
ArvinMeritor's senior vice president and CFO, effective immediately.
Rakesh Sachdev, senior vice president of ArvinMeritor and president of
Asia Pacific, will become executive vice president, chief administrative
officer and managing director of Emerging Markets of the new company, upon the
completion of the spin. However, until a successor is named, he will continue
to be responsible for ArvinMeritor's Asia Pacific region.
When the spinoff is completed, Carsten Reinhardt, senior vice president of
ArvinMeritor and president of the company's Commercial Vehicle Systems
business, will be named COO for ArvinMeritor.
In addition, Mary Lehmann, currently the company's senior vice president,
Strategic Initiatives, and Treasurer, will expand her responsibilities to
include Information Services, M&A activities, and Investor Relations. Vernon
Baker, currently senior vice president and general counsel, with overall legal
responsibility for all of ArvinMeritor's global operations and its
subsidiaries, and Environmental, Health and Safety, will also assume
responsibility for the global Human Resources organization.
ArvinMeritor will remain headquartered in Troy, Mich. Arvin Innovation
will be headquartered in Detroit, Mich., at the current location of the LVS
Detroit Technology Center, with other corporate offices located in Europe,
Asia Pacific and South America.
The spinoff is subject to customary conditions, including final approval
by ArvinMeritor's board of directors; completion of all required activities
with employee representatives; receipt of applicable consents; effectiveness
of a registration statement with the Securities and Exchange Commission;
receipt of a tax ruling from the IRS; and the approval of applicable
ArvinMeritor's common stock will continue to trade on the New York Stock
Exchange under the symbol ARM. We have applied for Arvin Innovation to be
listed on the NASDAQ global stock market under the symbol ARVI.
Until the spinoff is effective, ArvinMeritor's management intends to
recommend that its board continue its current dividend policy.
J.P. Morgan Securities Inc. is ArvinMeritor's lead financial advisor for
this transaction. UBS Securities is also advising ArvinMeritor on financial
matters relating to the transaction. Chadbourne & Parke LLP as well as Miller,
Canfield, Paddock and Stone, P.L.C. are acting as ArvinMeritor's legal
Light Vehicle Systems
ArvinMeritor's LVS business is a leading global provider of dynamic motion
and control automotive systems and components, with sales of $2.2 billion in
2007 -- $2.0 billion of value-added sales and $200 million of pass-through
sales. Of the value-added sales, more than 60 percent were outside North
America. ArvinMeritor's LVS business group is a market leader in many of the
product categories it serves, supplying components and integrated systems and
modules to the world's leading passenger car and light truck OEMs.
Through smart systems(TM) technologies, the intelligent application of
controls and electronics, LVS' traditional mechanical products are taking on
new form and function at both the component and system levels. With advanced
technology and systems design expertise -- in body systems (roof, and door
modules and systems, motors, latches, window regulators, and electronic
controls); and chassis systems (chassis and suspension modules and systems,
ride control products, electronic chassis control systems, global aftermarket
chassis products and wheels) -- LVS produces integrated, high-quality,
cost-effective performance-based solutions for practically all car and light
truck market segments.
The business will have approximately 9,000 employees with 42 facilities in
16 countries. LVS has interests in eight joint ventures (three consolidated
and five non-consolidated).
Commercial Vehicle Systems
Upon completion of the spinoff, ArvinMeritor will continue as a market
leader in the commercial vehicle systems business. ArvinMeritor's commercial
vehicle business is a leading supplier of drivetrain components and systems,
including axles and drivelines, braking systems, suspension systems and ride
control products for heavy- and medium-duty trucks, trailers, buses,
off-highway and military vehicles as well as to the commercial vehicle
The CVS business will have 62 global locations, including manufacturing
facilities, technical centers, warehouses and administrative offices. CVS has
approximately 10,000 employees in 15 countries. In 2007, the CVS business
recorded sales of more than $4.2 billion. CVS has interests in eleven joint
ventures (five consolidated and six non-consolidated).
ArvinMeritor will host a conference call and Web cast on Tuesday, May 6,
2008, at 8 a.m. (ET). To participate, call (617) 213-4847, ten minutes prior
to the start of the call. Please reference Passcode 30588392 when dialing in.
Investors and media can also listen to the conference call for seven days
by recording by visiting www.arvinmeritor.com. A replay of the call will be
available from 10:00 a.m. Tuesday, May 6 until 11:59 p.m. Tuesday, May 13 by
calling (888) 286-8010 within the United States and Canada, or (617) 801-6888
international callers. Please reference Passcode 54756165.
To access the listen-only audio Web cast, visit the ArvinMeritor Web site
at www.arvinmeritor.com and select the Web cast link from the home page or the
Today, ArvinMeritor, Inc. is a premier global supplier of a broad range of
integrated systems, modules and components to the motor vehicle industry. The
company serves commercial truck, trailer and specialty original equipment
manufacturers and certain aftermarkets, and light vehicle manufacturers.
Headquartered in Troy, Mich., ArvinMeritor employs approximately 19,000 people
in 24 countries. ArvinMeritor common stock is traded on the New York Stock
Exchange under the ticker symbol ARM. For more information, and high
resolution photography, visit the company's Web site at:
This press release contains statements relating to future results of the
company (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are typically identified by
words or phrases such as "believe," "expect," "anticipate," "estimate,"
"should," "are likely to be," "will" and similar expressions. There are risks
and uncertainties relating to the planned spin-off of ArvinMeritor's LVS
business, including the timing and certainty of completion of the transition.
In addition, actual results may differ materially from those projected as a
result of certain risks and uncertainties, including but not limited to global
economic and market cycles and conditions; the demand for commercial,
specialty and light vehicles for which the company supplies products; risks
inherent in operating abroad (including foreign currency exchange rates and
potential disruption of production and supply due to terrorist attacks or acts
of aggression); availability and sharply rising cost of raw materials,
including steel and oil; OEM program delays; demand for and market acceptance
of new and existing products; successful development of new products; reliance
on major OEM customers; labor relations of the company, its suppliers and
customers, including potential disruptions in supply of parts to our
facilities or demand for our products due to work stoppages; the financial
condition of the company's suppliers and customers, including potential
bankruptcies; possible adverse effects of any future suspension of normal
trade credit terms by our suppliers; potential difficulties competing with
companies that have avoided their existing contracts in bankruptcy and
reorganization proceedings; successful integration of acquired or merged
businesses; the ability to achieve the expected annual savings and synergies
from past and future business combinations and the ability to achieve the
expected benefits of restructuring actions; success and timing of potential
divestitures; potential impairment of long-lived assets, including goodwill;
potential adjustment of the value of deferred tax assets; competitive product
and pricing pressures; the amount of the company's debt; the ability of the
company to continue to comply with covenants in its financing agreements; the
ability of the company to access capital markets; credit ratings of the
company's debt; the outcome of existing and any future legal proceedings,
including any litigation with respect to environmental or asbestos-related
matters; the outcome of actual and potential product liability and warranty
and recall claims; rising costs of pension and other post-retirement benefits
and possible changes in pension and other accounting rules; as well as other
risks and uncertainties, including but not limited to those detailed from time
to time in filings of the company with the SEC. These forward-looking
statements are made only as of the date hereof, and the company undertakes no
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise, except as otherwise
required by law.
SOURCE ArvinMeritor, Inc.
CONTACT: Media, Lin Cummins, +1-248-435-7112,
firstname.lastname@example.org; Light Vehicle Systems, Kim Adler,
+1-248-435-1981, email@example.com; Investor Relations, Terry
Huch, +1-248-435-9426, firstname.lastname@example.org
Web site: http://www.arvinmeritor.com