Dana Corp. today announced that it and two affiliates have entered into an asset purchase agreement with Hendrickson USA L.L.C., a subsidiary of The Boler Co., and its affiliates for the sale of Dana’s trailer axle manufacturing business. Under the agreements, the buyers will acquire operations in Lugoff, SC; Barrie, Ontario and Wuxi, China for about $38 million in cash.
A divesture in the trailer axle manufacturing business will allow Dana, which is now under Chapter 11 bankruptcy protection, to focus on its core commercial vehicle drivetrain product lines. The sales are subject to bankruptcy court approval. Dana expects the bidding process to be completed and the sale to close in the fourth quarter of this year.
Currently Hendrickson is a major competitor with Dana in the trailer axle business.
In 2005, Dana’s continuing operations reported sales of $8.2 billion.
“The trailer axle business margins are likely to be pretty slim with high steel prices,” Chris Brady, president of Commercial Motor Vehicle Consulting told FleetOwner. “Dana is looking to divest some of its businesses to get out of bankruptcy.”
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