Auto parts maker Dana Corp. reportedly said on Friday it is selling its replacement parts unit for $US1.1 billion in cash to a New York-based equity group, The Cypress Group.
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The Associated Press (AP) said the sale of the Automotive Aftermarket Group includes 52 plants worldwide that employ about 13,000 people making brakes, filters and other parts – the business had sales of about $2 billion in 2003, or about a quarter of Dana’s overall annual sales.
The deal is expected to close in the third quarter, pending regulatory approvals, AP said, noting that the sale does not include Dana’s Clevite distribution and marketing operation in Ann Arbor, Michigan.
Dana chairman and chief executive Michael Burns reportedly said the company plans to use money from the sale to reinvest in its core businesses, reduce debt and add to its pension plans.
“Dana will be a more streamlined company that is better focused on delivering world-class component and systems solutions to our customers,” Burns told AP.
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By GlobalDataThe Associated Press said Cypress Group manages two private equity funds with more than $3.5 billion.
Cypress has had success investing in the automotive industry, including with Lear Corp., Terry McCormack, president of the Automotive Aftermarket Group, told AP.
Dana reportedly announced last December that it planned to sell the parts unit a week after it successfully fought off an unwanted takeover bid by rival ArvinMeritor Inc.
AP noted that the company has been slimming down over the last several years – two years ago Dana began eliminating 11,000 jobs through plant closings and consolidations. The reductions came on top of about 10,000 job cuts because of declining auto production and slow US sales.
