Dana Holding has agreed to sell its global structural products business to Metalsa, the largest vehicle frame and structures supplier in Mexico.  The operations and assets to be sold generated consolidated revenues of approximately US$695m in 2008.

The agreement provides for Metalsa and affiliates to acquire the business for an aggregate purchase price of up to $150m and the buyer's assumption of related liabilities related to the business. The purchase price includes $130m payable at closing, $5m payable on the first anniversary of closing; and up to $15m subject to an earn-out.  About 10% of the $130m closing payment will be held in escrow to support Dana's post-closing indemnification obligations to Metalsa.

The parties will also enter into additional agreements including a transition services agreement, supply agreements, and intellectual property license arrangements.

Dana will retain and continue to operate structural products operations at its Longview, Texas, facility.

In connection with the completion of this transaction, Dana expects to book a pre-tax loss in the range of $150m to $180m, most of which is expected to be recorded in the fourth quarter of 2009 as impairment of the related long-lived assets.

"The sale of our structural products business enables Dana to sharpen our focus and resources more squarely on our axle, driveshaft, sealing, and thermal products businesses," said president and CEO Jim Sweetnam. 

"At the same time, the transaction also offers the talented people in the operations to be sold an excellent opportunity to grow and prosper with a respected company that is strategically focused on the structures business."

The operations sold to Metalsa include 10 facilities in the United States, Argentina, Australia, Brazil, and Venezuela plus Dana's interest in its Chassis Systems joint venture in the United Kingdom.

The operations manufacture and assemble full-perimeter frames, space frames, cradles, trailing axles, suspension components, and under body stampings for the light vehicle market, and frames and related components for the medium- and heavy-truck markets.  Collectively, they employ about 2,800 people.