Dana Sues Competitor Over Confidentiality

TOLEDO, Ohio August 14, 2003; The AP reported that auto parts maker Dana Corp. sued competitor ArvinMeritor Inc. on Thursday, accusing it of using sensitive information to launch a hostile takeover. The lawsuit asks a judge to stop ArvinMeritor from pursuing a takeover of Toledo-based Dana because confidential information was used in the bid.

Two years ago, the two auto supply companies considered a joint venture combining their aftermarket businesses. Last month, ArvinMeritor offered $15 a share in cash for all outstanding shares of Dana, its larger competitor.

Dana's board rejected the proposal, saying it was financially inadequate and a high-risk proposition. Dana's lawsuit claims that ArvinMeritor used confidential information from the 2001 talks to pursue a hostile takeover of Dana.

In court papers, Dana argues that some information it shared with ArvinMeritor -- including breakdowns of Dana's finances and future growth expectations -- were to be used only to consider the joint venture.

Dana believes the information was used in the takeover bid. The lawsuit accuses ArvinMeritor's chairman and chief executive officer, Larry Yost, of telling analysts in a July 8 conference call about the confidential discussions between the rivals in 2001.

"Based in whole or in part on what they learned from Dana, confidentially in 2001, Yost and ArvinMeritor management assessed Dana as a merger partner and takeover target and then determined that ArvinMeritor should pursue its offer," according to the lawsuit.

Efforts to reach ArvinMeritor officials for comment were unsuccessful due to Thursday's power outage.

Dana sales totaled about $10 billion in 2002 and it employs more than 60,000 people worldwide. ArvinMeritor had $7 billion in revenue in 2002 and has 32,000 employees at 150 plants in 27 countries.

Dana Corp.: http://www.dana.com/