Arvin and Meritor to Merge

Arvin Industries, Inc. and Meritor Automotive recently announced that the two companies have entered into a definitive agreement to combine their businesses in a strategic merger of equals. The transaction will create a premier global supplier of a broad range of integrated systems, modules and components for light vehicle, commercial truck, trailer and specialty original equipment manufacturers (OEMs) and related aftermarkets.

The new company, to be called ArvinMeritor, will have combined revenues of $7.5 billion. It will be incorporated in Indiana and will have its corporate headquarters in Troy, Mich. All its operating units will remain at their current locations. The merger brings together two strong companies, which by combining their financial and strategic strengths, complementary products and businesses, technology and brand leadership, world-class operations, management talent, and dedicated workforces, will strengthen their ability to better serve their customers, add value for shareholders, and take advantage of global market opportunities.

The combined product portfolio and technological expertise of the two companies will support their goal of becoming a global provider of integrated solutions for light and heavy vehicle undercarriage, drivetrain, exhaust and aperture modules, and systems. The combination will also expand their light and heavy vehicle systems product range and strengthen their presence in the worldwide motor vehicle aftermarket.

Under the terms of the agreement, which has been approved by both boards of directors, Arvin shareholders will receive 1.00 share of ArvinMeritor common stock plus $2.00 of cash consideration for each share of Arvin common stock. Meritor shareholders will receive 0.75 shares of ArvinMeritor common stock for each share of Meritor common stock. Meritor shareholders will own approximately 65.8 percent and Arvin shareholders will own approximately 34.2 percent of the combined company's shares.

"The new company represents a perfect fit between two outstanding enterprises and management teams,'' said Larry Yost, chairman and CEO of Meritor. "Each enterprise has an excellent track record of growing earnings and major accomplishments over the past few years."