ArvinMeritor says it will pursue acquisition after Dana rejects offer

| Monday, July 28, 2003

ArvinMeritor Inc. said July 22 that the company would continue to pursue its proposed acquisition of Dana Corp. after that company's board told its stockholders they should reject the takeover bid.

On July 9, 2003, ArvinMeritor offered $15 per share for all of Dana's outstanding common stock.

"Despite the fact that the Dana board has rejected our all-cash tender offer and refuses to negotiate with us, we are committed to this transaction," ArvinMeritor said in a prepared statement. "Our offer permits Dana's shareowners to realize an attractive cash value for their shares today without bearing the risks of Dana's long-term restructuring efforts.

"We believe Dana's board and management team has failed to seize this unique opportunity to maximize value for its shareowners. As we have indicated previously, if Dana's Board is willing to work with us to consummate a transaction quickly, we may be prepared to analyze further whether a higher value is warranted. In addition, because it remains our strong preference to work together with the Dana Board, we are flexible in considering a mix of cash and stock consideration if it will facilitate a transaction.

"We believe that Dana's response recites a litany of manufactured reasons to oppose this combination. We are confident that there is not one issue listed in today's press release by Dana that cannot be resolved."

The offer by ArvinMeritor and withdrawal rights are scheduled to expire at 5 p.m. Aug. 28 unless the company extends them.

In June, ArvinMeritor's CEO Larry Yost offered Dana Corp. $14 a share, but he said the offer made it no further than the Dana Board of Directors. In the July 8 letter, Yost informed Dana's CEO he was prepared to directly offer shareholders $15 per share in cash.

The proposed transaction has a total equity value of about $2.2 billion. Dana has $2.2 billion in other interests that bring the total enterprise value to about $4.4 billion.

ArvinMeritor Inc. is a $7-billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and related aftermarkets. Dana Corp. is a parts maker for cars and trucks, including such products as axels, drive shafts and brakes.

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