ArvinMeritor on Thursday, Jan. 8, provided an update on the previously announced process to sell its Light Vehicle Systems (LVS) business and the reorganization of LVS.
“We are firmly committed to our long-term strategy of focusing on the commercial vehicle on- and off-highway market segments for both original equipment manufacturers and aftermarket customers,” says Chip McClure, chairman, chief executive officer and president of Troy, Mich.-based ArvinMeritor. “As previously announced, we were in negotiations to sell the LVS business group in its entirety. However, in light of the unprecedented challenges in the credit markets and the volume weakness in our industry, we have determined that in this financial environment, we cannot capture the appropriate value for LVS by selling the business as a whole. We are confident that this decision will ultimately generate the best returns for our shareholders.”
The company says it will reorganize its LVS business group to include:
· Body Systems. While the company continues to pursue a sale of the Body Systems business separately, it will be managed to continue to improve its financial performance and to ensure that a future sale will provide an acceptable return to ArvinMeritor shareholders;
· Chassis Systems. The company will continue to explore and evaluate strategic alternatives for a timely and orderly exit from this business; and
· Wheels. As previously announced, ArvinMeritor expects to retain the Wheels business.
In May 2008, ArvinMeritor announced a plan to spin off its LVS business to its shareholders within 12 months, contingent upon satisfactory financial and automotive market conditions. Due to the challenging market environment, in October 2008 the company announced that while a spinoff was still an option, it also was investigating alternatives to achieve the separation, including a potential sale. With Thursday’s announcement, ArvinMeritor says it remains committed to separating the businesses.
