Dana to Sell Brake Hose Business as Core Focus Continues
22 December 1997
Dana to Sell Brake Hose Business as Core Focus Continues
TOLEDO, Ohio, Dec. 22 -- In another move designed to further
its focus on core businesses, Dana Corporation today announced
that it has signed an agreement to sell its brake hose business to CF Gomma,
S.p.A. of Passirano, Italy.
Subject to regulatory approval, this transaction is expected to close by
the end of January 1998. Terms of the agreement were not announced.
The operations to be sold are Dana's hydraulic brake hose facilities in
Columbia City, Ind., and Garching, Germany.
CF Gomma said it intends to continue operating the facilities it is
purchasing and looks forward to the approximately 475 people employed in those
businesses joining their worldwide operation.
Dana Chairman Southwood J. Morcott said the purchase by CF Gomma -- which
considers brake products a core business -- will provide a solid growth
opportunity for Dana people affected by the sale. "We believe CF Gomma can
provide a solid environment for the future growth of the brake hose products
operations and the people who work for them," he said.
"At the same time, this move allows Dana to better focus on the products
and systems we consider strategic to our future growth. This action is
another step in our strategic plan to increase shareholder value," he added.
The brake hose business is expected to account for about $72 million of
Dana's 1997 sales. The transaction will result in an after-tax gain to Dana
of $3 million (3 cents per share), to be recognized in the first quarter of
1998.
Dana is not selling its Weatherhead branded industrial hose and fitting
line of products. The company will continue to manufacture the primary
products of its Boston Weatherhead Division, which include industrial hoses
and fluid connectors. The Boston Weatherhead Division is part of Dana's
Industrial Products Group, which also consists of the Warner Electric
Industrial Products Division and the Warner Electric Motors and Controls
Division.
When completed, the action will be the ninth divestiture in a series of
strategic moves that Dana initiated in 1997 to focus on its core businesses.
Among them, Dana has sold its U.S. heavy-truck structural components
operation, European warehouse distribution operations, vehicular clutch
business, transmission business, leaf spring manufacturing assets, flat rubber
products business, and its 49-percent interest in Korea Spicer Corporation.
Also this year, Dana announced its intention to purchase Eaton
Corporation's heavy axle and brake operations and has purchased Clark-Hurth
Components and the Sealed Power Division of SPX Corporation. Additionally, it
has entered into various joint ventures, including a 75-percent share of Wix-
Filtron, a Polish manufacturer of filtration products.
Dana Corporation is a global leader in the engineering, manufacture, and
distribution of products and systems for the automotive, engine, heavy truck,
off-highway, and industrial markets. It also operates a leasing services
business, Dana Credit Corporation. Founded in 1904 and based in Toledo, Ohio,
Dana operates facilities in 30 countries and employs more than 48,000 people.
The Internet address for Dana's home page is http://www.dana.com.
CF Gomma, a privately held company, manufactures a variety of brake hose
products, anti-vibration products, air springs, and rubber compounds for the
automotive market. The company expects sales of nearly $220 million in 1997.
CF Gomma's chief executive officer, Paolo Cingia, said, "CF Gomma is one
of the European leaders in the manufacture of anti-vibration products, air
springs, and brake hoses. This acquisition positions us to be the largest
manufacturer of brake hoses worldwide."
SOURCE Dana Corporation