ArvinMeritor is to spin off its light vehicle systems (LVS) business to shareholders, with the commercial vehicle systems (CVS) business remaining with the company.
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“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 chairman, CEO and president Chip McClure.
“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.”
The spinoff – to be named Arvin Innovation – would be implemented through a pro rata tax-free dividend to shareholders. Upon completion, shareholders will own 100% of the common stock of Arvin Innovation.
Shareholder approval 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 customary approvals.
McClure will remain in his current post while James Marley, currently a board member, will lead Arvin Innovation’s board as non-executive chairman.
Phil Martens, currently ArvinMeritor’s senior vice president and president, light vehicle systems, will become the president and CEO of Arvin Innovation.
