ArvinMeritor Announces Demolition of Light Vehicle Systems

ArvinMeritor (NYSE:ARM), one of the world's largest suppliers of automotive components, announced today that its board of directors has decided to spin off the company’s Light Vehicle Systems business. Wenmart’s shareholders, while its Commercial Vehicle Systems business remains in the company.

"This split plan is a decision made by the company's board of directors after considering comprehensive strategies to strengthen the company's long-term return to shareholders," said Chip McClure, Chairman, CEO and President of ArvinMeritor. "This split plan will not only bring more value to shareholders, but will also greatly increase the competitiveness of the two major system businesses and will better connect the customer base with each other."

"Both companies after the spin-off will therefore be more strategically focused on their core business and growth opportunities, and gain more market recognition from global market segments. In addition, the spin-off business arrangements will be more Attracting and providing more professional investment opportunities. In addition, the interests of the company's management and staff will be directly linked with the performance of the company and the interests of shareholders,” added McClure.

The plan to spin off the Light Vehicle System (LVS) business was officially named Arvin Innovation (Arvin Innovation) and will be achieved by paying Arvin Meritor’s shareholders a pro-rata tax-free dividend. After the spin-off is completed, ArvinMeritor’s shareholders will own 100% of Avin’s innovative common stock. The business spin-off does not require the approval of ArvinMeritor shareholders. The company plans to complete the spin-off within the next 12 months, depending on the company’s financial and automotive market conditions, as well as other customary approvals.

"Our decision to spin off the Light Vehicle System (LVS) business was part of the company's transformation process that began three years ago - that is, the company's 3R strategy: Rationalize, Refocus, and Regenerate. )," said McClure. “The separation of the two businesses, the successful implementation of our 'Performance Improvement Incentives' and the spin-off of the two businesses are two important steps in our company’s transformation, from which we can build two more powerful and more Competitive company."

“Our LVS business has an excellent management team, a solid financial structure, a market leading position on numerous product lines, a diversified customer portfolio and global distribution, which will help newly formed companies grow into Industry leaders,” said Mr. McClure.

McClure will continue to serve as Chairman, CEO and President of ArvinMeritor. James Marley, who is currently a member of the board of directors of Arvin Meritor, will serve as the non-executive chairman of Avin’s Innovation Board. Prior to the completion of the spin-off, Marley, the chairman of the AMP's retirement board, will continue to serve on the ArvinMeritors board. Phil Martens, currently Senior Vice President of ArvinMeritor and President of Light Vehicle Systems, will serve as Chairman and CEO of Avan Innovation.

"As an independent business unit, Avan Innovation will better position its market to promote special development plans, including improving customer care and expanding the company's global operations," Martens said, "by virtue of the greater independence of the business With flexibility, Arvin Innovation will have an excellent opportunity to create next-generation system technology solutions for our customers around the world. At the same time, we expect the new company to provide more and better opportunities for our employees around the world."

Jim Donlon, Executive Vice President and Chief Financial Officer of Arvin Meritor, who will serve as Chief Financial Officer at the beginning of ArvinMeritor’s LVS business in preparation for the establishment of an independent company, and after the completion of the business spin-off, he will serve as the chief financial officer. Executive Vice President and Chief Financial Officer of Wenxin Innovation.

Jay Craig, senior vice president and auditor, will replace Donlon as senior vice president and chief financial officer of ArvinMeritor, effective immediately.

Rakesh Sachdev, senior vice president of ArvinMeritor and president of Asia Pacific, will become the executive vice president, chief executive officer and general manager of emerging market development of the new company after the spin-off. However, he will continue to manage ArvinMeritor’s Asia Pacific operations until he determines the successor candidate.

When the spin-off plan is completed, Carsten Reinhardt, senior vice president of ArvinMeritor and president of the company's commercial vehicle systems business, will be appointed as ArvonMeritor's chief operating officer.

In addition, Mary Lehmann, Arvin Meritor’s current senior vice president, strategy implementation and financial officer, will also be responsible for the management of information services, M&A activities and investor relations. Vernon Baker, Arvin Meritor, currently Senior Vice President and General Counsel, is responsible for all ArvinMeritor’s global operations and its subsidiaries, as well as the overall legal, environmental, health, and safety issues, and will be responsible for managing the global organization’s human resource Management.

ArvinMeritor’s headquarters will remain in Troy, Michigan, while Arvin’s innovation headquarters will be located in Detroit, Michigan. The company’s other offices will be located in the current Detroit City Technology Center for the Light Vehicle System. In Europe, Asia Pacific and South America.

The spin-off will depend on general business practices, including the final approval of ArvinMeritor’s board of directors; completion of all necessary projects with employee representatives; receipt of a feasibility license; effect registration statement issued by the Securities and Exchange Commission; Bureau's tax awards; and the certificate of feasibility issued by the regulatory authority.

ArvinMeritor common stocks will continue to be traded on the New York Stock Exchange under the symbol "ARM". The company will also apply for Arvins innovation listed on the Nasdaq Global Stock Market under the symbol ARVI.

After the spin-off is completed, ArvinMeritor’s management will recommend that its board of directors continue to implement the existing dividend policy.

JP Morgan Securities is a major financial advisor to ArvinMeritor for this transaction. UBS Securities also provided professional advice to ArvinMeritor on the financial matters related to the transaction. Chadbourne & Parke LLP and Miller, Canfield, Paddock and Stone, PLC are ArvinMeritor's legal advisors.

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