Meritor Automotive and ZF To Form Strategic Joint Venture: ZF Meritor
10 June 1999
Meritor Automotive and ZF To Form Strategic Joint Venture: ZF Meritor
LAS VEGAS, June 9 -- Meritor Automotive Inc. and
ZF Friedrichshafen AG, two leading global automotive components and systems
suppliers, today announced their intention to form a joint venture, ZF Meritor
LLC, to produce technologically-advanced medium- and heavy-duty transmissions
for heavy vehicle original equipment manufacturers and the aftermarket, for
the United States, Canada and Mexico. The announcement was made at the 1999
International Trucking Show.
The joint venture will combine the strengths of Meritor's marketing and
distribution capabilities and existing line of transmission products with ZF's
technological expertise to engineer advanced truck transmission components and
systems. ZF is a leading global independent manufacturer of transmission
products. Sales and service of the complete product range will originate and
be managed on behalf of the joint venture by Meritor's 100-person sales
department, which will include its North American field operations and
aftermarket teams.
Details of the Joint Venture
ZF and Meritor will each own 50 percent of the new venture, which will be
based at the Meritor transmission manufacturing plant in Laurinburg, N.C. A
60 percent interest in Meritor Clutch Company will also be included in the ZF
Meritor joint venture. Both ZF and Meritor believe that, with the advent of
transmission automation, the clutch is rapidly becoming a component of the
transmission system.
The transaction, expected to close in July 1999, is subject to customary
regulatory approvals. Additional terms about the transaction were not
disclosed.
Prakash Mulchandani, president of Meritor's Heavy Vehicle Systems
business, said, "We are very excited about the formation of ZF Meritor which,
based on the industry leadership of each of its parent companies, is ideally
positioned to better serve the North American truck market.
"Our goal is to leverage the competitive strengths of both Meritor and ZF
to deliver technologically-advanced transmission products and make ZF Meritor
transmissions a leading brand name synonymous with innovation, quality and
superior performance," he added.
Wolfgang Vogel, ZF executive vice president, said, "We view our joint
venture with Meritor as an ideal opportunity for growth and sustained
leadership in the global transmission marketplace. In addition, it marks an
excellent forum for ZF to further demonstrate its world-renowned technical
expertise. Meritor is an excellent, high-performance automotive systems and
components supplier and we look forward to a long and productive
relationship."
The joint venture will be managed by Richard Martello, who will serve as
president of ZF Meritor LLC. He has 25 years of management experience with
Meritor and most recently served as general manager of Meritor's Transmission,
Clutch and Driveline business.
"This is a great blend of two industry leaders that expands the scope of
the technologies and services we offer -- all for the benefit of our
customers. We're very fortunate to have found the right partner with which to
enter such a significant alliance. ZF shares the same passion for customer
service and technological expertise as we do," said Martello.
Strengths of Both Partners
Both Meritor and ZF enjoy a long and rich heritage in the trucking
industry. Meritor, which spun-off from Rockwell International as a separate
publicly-traded company in 1997, entered into the heavy-duty transmission
market in 1989. The company has a proven track record in effectively
launching new products through its established field operations, sales and
service network and its outstanding position with North American OEMs, their
dealers and fleet customers.
ZF is the market leader for commercial transmissions in Europe, and will
provide the joint venture with technology to complete the product range for
the class 6-8 commercial vehicle market segment.
ZF Friedrichshafen AG is an established, global leader in the design and
production of transmissions, axles, chassis and steering systems technology
for various kinds of vehicles. Based in Friedrichshafen, Germany, ZF is one
of the largest automotive suppliers worldwide. The company employs more than
35,000 people. Eleven of the 53 global production facilities are based in
North America.
In fiscal 1998, ZF had annual revenues of 10.1 billion DM, or US $5.9
billion. ZF had annual transmission revenues for commercial and special
vehicles of 2.4 billion DM, or US $1.4 billion, in fiscal 1998, making it one
of the company's largest businesses. In addition to commercial vehicle
transmissions, ZF manufactures transmissions for cars, off-road and marine
applications.
Meritor, with 1998 sales of US $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.
Meritor World Wide Web Site Address: http://www.meritorauto.com
ZF Friedrichshafen AG World Wide Web Site Address: http://www.zf-group.de