Borg-Warner Automotive Buys Cooling Systems From Eaton
1 October 1999
Borg-Warner Automotive Buys Cooling Systems From Eaton; Acquisition Expands Engine Technology Base
CHICAGO, Oct. 1 -- Borg-Warner Automotive, Inc.
today announced that it has completed the acquisition of the Fluid Power
Division of Eaton Corporation , one of the world's leading
manufacturers of powertrain cooling solutions for the global automotive
industry, for $310 million. Borg-Warner Automotive said it expects the
transaction to be accretive to earnings, and both companies expect Eaton's
interest in Fluid Power's Ningbo, China joint venture to be transferred in the
next few weeks.
"The acquisition of this premier technology from Eaton is a great
strategic fit for us, offers excellent profitability and provides management
depth for us as we grow the business," said John F. Fiedler, chairman and
chief executive officer of Borg-Warner Automotive. "We are now positioned to
globalize a modular cooling systems approach across a full range of vehicle
types, further serve markets in Europe and developing nations, and enhance our
overall growth opportunities in engine-related components and systems. Engine
technology is currently the fastest growing segment of our business and we
expect it to account for over 50% of our sales in 2000." Fiedler added that
innovations and changes in cooling system designs are driven by the need to
help customers meet increasingly stringent global fuel and emission standards.
Eaton Chairman Stephen R. Hardis said, "The Eaton Fluid Power Division had
achieved operational and technical leadership in its markets. However, we
felt it would be difficult for Eaton to maintain those positions considering
the dramatic realignment of individual component manufacturers to provide
complete engine cooling systems solutions."
Borg-Warner Automotive will combine its existing cooling systems business
with that acquired from Eaton to form Borg-Warner Automotive Cooling Systems.
John McGill, formerly head of the Eaton division, has been named president and
general manager of the new operating group reporting to John Fiedler. Bruce
Dufour of Borg-Warner Automotive, has been named senior vice president, sales
and marketing.
The Eaton Fluid Power Division, with 1998 sales of approximately $190
million, designs and produces a variety of viscous fan drive cooling systems
primarily for passenger vehicles such as light trucks, sport-utility vehicles
and vans. Headquartered in Marshall, Michigan, it employs 1,050 people. The
unit has operations in North America and Europe, and an expanding presence in
South America and Asia. Major customers include Ford, General Motors/Isuzu
and DaimlerChrysler.
Chicago-based Borg-Warner Automotive, Inc. is a product leader in highly
engineered components and systems for vehicle powertrain applications
worldwide. The company has 12,000 employees and operates 54 manufacturing and
technical facilities in 13 countries. Customers include Ford, DaimlerChrysler,
General Motors, Toyota, Caterpillar, Navistar, PSA and VW Group. The Internet
address for Borg-Warner Automotive is: http://www.bwauto.com/
Eaton Corporation is a global manufacturer of highly engineered products
that serve industrial, vehicle, construction, commercial, aerospace and
semiconductor markets. Principal products include hydraulic products and
fluid connectors, electrical power distribution and control equipment, truck
drivetrain systems, ion implanters and a wide variety of controls.
Headquartered in Cleveland, the company has 64,500 employees and
215 manufacturing sites in 25 countries around the world. Sales for 1998 were
$6.6 billion. On April 9, 1999 Eaton acquired Aeroquip-Vickers, Inc., which
had sales of $2.1 billion in 1998. The Internet address for Eaton is:
http://www.eaton.com/
Statements contained in this news release may contain forward-looking
statements as contemplated by the 1995 Private Securities Litigation Reform
Act that are based on management's current expectations, estimates and
projections. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements. Forward-looking
statements are subject to risks and uncertainties, which could cause actual
results to differ materially from those projected or implied in the
forward-looking statements. Such risks and uncertainties include:
fluctuations in domestic or foreign automotive production, the continued use
of outside suppliers by original equipment manufacturers, fluctuations in
demand for vehicles containing Borg-Warner Automotive's products, general
economic conditions, as well as other risks detailed in Borg-Warner
Automotive's filings with the Securities and Exchange Commission, including
the Cautionary Statements filed as Exhibit 99.1 to the Form 10-K for the
fiscal year ended December 31, 1998.