UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2007
Dana Corporation
(Exact name of registrant as specified in its charter)
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| Virginia
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1-1063
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34-4361040 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number) |
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| 4500 Dorr Street, Toledo, Ohio
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43615 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (419) 535-4500
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
In March 2006, Dana Corporation (Dana) and forty of its domestic subsidiaries (collectively,
the Debtors) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy
Court). The Debtors’ Chapter 11 cases have been consolidated for procedural purposes under the
caption In re Dana Corporation, et al., Case No. 06-10354 (BRL), and are being administered
jointly.
Dana had announced plans to divest its engine hard parts business and classified the business
as a discontinued operation in 2005. This business consists of 39 facilities in 10 countries
(including 10 facilities located in the United States and owned by the Debtors) that manufacture
piston rings, engine bearings, cylinder liners and camshafts. The business had annual revenues of
approximately $670 million in 2005.
On December 4, 2006, Dana announced that it had entered into a Stock and Asset Purchase
Agreement with MAHLE GmbH, dated as of December 1, 2006 (the Agreement) for the purchase of the
engine hard parts business, subject to the approval of the Bankruptcy Court, government regulatory
approvals and customary closing conditions.
On
February 23, 2007, the Bankruptcy Court entered an order approving the Agreement. A copy of
the Agreement is attached to this report as Exhibit 99.1. Under the Agreement, MAHLE and certain of its
affiliates will acquire the tangible and intangible assets of the engine hard parts business from
Dana and certain of its affiliates, as well as the shares of a Dana affiliate involved in the
engine hard parts business, for an aggregate cash payment of $97 million. The buyers will also
assume certain liabilities related to the business.
In connection with this transaction, the parties will enter into various ancillary agreements
at closing. These include (i) a distribution agreement under which a MAHLE affiliate will serve as
the exclusive distributor for certain of Dana’s Victor Reinz® branded products in the
United States and Canada for a period of 10 years and in Mexico and certain Central and South
American countries for the same period once Dana’s existing distribution agreements in those
countries expire, and (ii) a transition services agreement, the terms of which have not yet been
finalized.
The parties expect to receive final regulatory approvals and to close this transaction in the
first quarter of 2007.
Item 2.06. Material Impairments.
In addition to non-cash pre-tax valuation adjustments of $88 million that Dana had recorded
for the divestiture of its engine hard parts business in the first nine months of 2006, Dana
recorded valuation adjustments in the fourth quarter of 2006 and
expects to record further
adjustments at the time of closing. The net effect of these additional adjustments is expected to
be a non-cash pre-tax charge of $15 to $20 million.
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