Dana Corp and two affiliates have entered into asset purchase agreements with Hendrickson USA LLC, a subsidiary of The Boler Co, and its affiliates for the sale of Dana's trailer axle manufacturing business. Under terms of the agreements, the buyers will acquire certain assets in Lugoff SC; Barrie, Ontario, Canada; and Wuxi, China, that are used to manufacture heavy-duty trailer axles and suspensions. The aggregate price is about $38 million in cash. The buyer will also assume limited liabilities related to the business.
The transactions are subject to the approval of the United States Bankruptcy Court for the Southern District of New York, which has jurisdiction over Dana's Chapter 11 reorganization proceedings. As a standard part of divestiture, Dana has filed a motion with the court seeking approval of procedures that will provide an opportunity for competitive bids on the trailer axle assets before the court approves the sale. Dana expects bidding to be completed and the sale to close in fourth quarter 2006.
Dana's trailer products business employs about 180 people at two principal locations: Lugoff and Barrie. Under terms of the agreements with Hendrickson, around 90 employees, a commercial vehicle building, and trailer manufacturing assets at Lugoff will go to the buyer. In Barrie and Wuxi, only trailer manufacturing assets will be sold to the buyer. Approximately 90 positions in Barrie will be eliminated when the assets are relocated by the buyer. In Wuxi, employees will be reassigned to Dana's remaining operations within the facility.
In conjunction with the asset purchase agreements, Bendix Spicer Foundation Brake LLC, a joint venture in which Dana has an interest, has agreed to continue to supply Bendix brake systems to Hendrickson.