ArvinMeritor to Divest Businesses Units

Arvinmeritor has announced that it will divest the company’s Light Vehicle Aftermarket (LVA) business group and take a “non-cash goodwill impairment charge” of $190 million (£103 million) in its fourth quarter budget. In addition, the company announced its plan to divest its Roll Coater coil coating business, a wholly owned subsidiary.

The company claims that these moves are designed to sharpen ArvinMeritor’s focus on its global OEM business. “These divestitures will enable ArvinMeritor to leverage our core competencies in the global automotive and commercial truck markets to provide the innovative solutions that give our OE customers a competitive edge,” said ArvinMeritor chairman, CEO and president Charles G “Chip” McClure. “By concentrating our resources – and longstanding engineering and design expertise – on our core competencies, we will continue to generate even more value for our customers and our shareowners.

The automotive supplier will report the LVA and coil coating businesses as discontinued operations when it reports its fourth-quarter earnings on 15 November, 2004. Additional information concerning these actions will be provided at that time. “We believe these decisions are necessary steps to improve our financial flexibility and strengthen our long-term profitability,” said McClure.

ArvinMeritor says it plans to use the proceeds from the sales to strengthen its balance sheet and selectively reinvest in its core business segments. The company expects to complete its plans during the 2005 financial year.