Dana Incorporated said it had agreed to purchase axle housing and driveline shaft manufacturing operations from US Manufacturing Corporation (USM).
Dana plans to acquire USM's Warren, Michigan, assets in exchange for US$100m in cash.
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"This acquisition will increase Dana's revenue from passenger and commercial vehicle manufacturers and will transition significant purchased content to vertically integrated supply. It will also provide Dana with new product and process technologies for lightweighting," the supplier said in a statement.
"The acquisition of USM's Warren operation allows us to capitalise on an important opportunity that will strengthen the supply chain for several of Dana's most strategic customers and programmes," said Jim Kamsickas, president and CEO. "The transaction also includes process technologies that augment Dana's existing portfolio of lightweighting innovations which assist our customers in achieving their sustainability and fuel efficiency goals."
The acquisition provides Dana with USM's proprietary tube-manufacturing processes and intellectual property for lightweight thin-wall axle tubes and hollow axle shafts. The products are constructed using a unique proprietary cold-extrusion process that creates varying wall sizes engineered for specific applications. This allows for greater strength in required areas during operation, while delivering significant overall weight savings for the components.
"This acquisition will also expand Dana's substantial manufacturing footprint in the US and advance our strategy for developing, designing, and manufacturing products in close proximity to our customers," said Bob Pyle, president of the supplier's Light Vehicle Driveline Technologies unit.
The purchase is expected to be completed in the first quarter of 2017.
