Meritor Automotive Advances Global Growth Initiatives
8 December 1998
Meritor Automotive Advances Global Growth Initiatives
Company Announces Plans to Acquire Euclid Industries and
Finalizes Negotiations for Volvo's Heavy Truck Axle Manufacturing Operations
TROY, Mich., Dec. 7 -- Meritor Automotive, Inc.
today announced that it has signed a definitive agreement that would allow
Meritor to acquire Euclid Industries. Euclid is a leading North American
supplier and manufacturer of aftermarket replacement parts for a wide range of
medium- and heavy-duty vehicles and has been a premier participant in the
North American heavy-duty aftermarket. Terms of the agreement were not
disclosed.
As previously announced, the Company also said it signed a definitive
agreement to acquire Volvo's heavy truck axle manufacturing operations for
approximately $135 million in cash. Under the terms of the agreement, Meritor
will become the primary supplier of heavy-duty axles for Volvo's global heavy
truck operations.
Meritor has been aggressively pursuing growth initiatives to further
strengthen its position in the global automotive original equipment and
aftermarket segments. In late November, the Company signed a definitive
agreement to purchase the Heavy Vehicle Braking Systems (HVBS) business of
London-based LucasVarity plc, a strategic acquisition which is expected to add
approximately $400 million in annualized sales to Meritor's revenues and a
blue-chip product line to Meritor's growing strength in braking systems
worldwide.
Meritor Chairman and Chief Executive Officer Larry D. Yost said: "The
actions we have announced today, as well as the LucasVarity HVBS acquisition,
clearly reflect Meritor's commitment to offer our original equipment and
aftermarket customers one of the most comprehensive product portfolios in the
worldwide automotive components industry.
"The agreement to acquire Euclid Industries marks a significant step in
Meritor's efforts to strengthen our profitable aftermarket business by adding
a comprehensive offering of replacement components to Meritor's existing
product lines, while it helps provide further balance against the cyclical
impact of our served OEM markets, Euclid's well-known and highly-regarded
brand name will enhance Meritor's position as an increasingly broad-based
supplier of quality aftermarket parts," Yost said.
Headquartered in Cleveland, Ohio, privately-held Euclid Industries is a
leading supplier and manufacturer of more than 15,000 high quality aftermarket
replacement parts for heavy-duty trucks, trailers, tractors, school buses and
specialty vehicles. Its customers include more than 600 independent
heavy-duty truck parts distributors in approximately 2,200 locations across
the United States and Canada. Euclid generated sales of more than
$100 million for its fiscal year ended August 31, 1998. The transaction,
which is expected to close by the end of this month, is subject to customary
regulatory approvals.
Euclid Industries Chairman Raymond J. Zukowski said, "I am confident that
by combining Euclid's custom product solutions, state-of-the-art logistics and
distribution systems, and industry leading catalog with Meritor's strength in
both its original equipment and aftermarket businesses, Meritor will create
substantial growth opportunities now and in the future."
Yost stated: "These three acquisitions satisfy two key elements of our
growth strategy -- to grow our Worldwide Aftermarket business and to expand
our Heavy Vehicle Systems business in Europe. During the next several months,
Meritor's leadership is fully committed to drive the smooth and effective
integration of these acquisitions. We intend to take full advantage of the
substantial synergies and efficiencies that these new businesses bring to
Meritor.
"Having said that, I want to emphasize Meritor's focus on another key
element of our strategy which is to continue to strengthen and grow our Light
Vehicle Systems (LVS). LVS provides additional balance and diversity to our
business portfolio and accounts for 40 percent of our global revenues.
Meritor is committed to take full advantage of the synergies between our
Heavy- and Light Vehicle Systems businesses in technologies, manufacturing
expertise and the market and customer access these businesses have in common,"
Yost stated.
Meritor, with 1998 sales of more than $3.8 billion, is a global supplier
of a broad range of components and systems for commercial, specialty and light
vehicle OEMs and the aftermarket. Meritor consists of two businesses: Heavy
Vehicle Systems, a leading supplier of drivetrain systems and components for
medium- and heavy-duty trucks, trailers and off-highway equipment and
specialty vehicles including military, bus and coach, and fire and rescue; and
Light Vehicle Systems, a major supplier of roof, door, access control,
suspension and seat adjusting systems and wheels for passenger cars, light
trucks and sport utility vehicles.
This news release contains statements relating to future results that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected
as a result of certain risks and uncertainties, including but not limited to
those detailed from time to time in the Company's Securities and Exchange
Commission filings.