Meritor Auto Parts Firm to Buy Arvin

Meritor Automotive said it is buying Arvin Industries in a deal that will create a new auto parts company with a market value of about $1.6 billion. The combined operation will be called ArvinMeritor Inc. and will have sales of about $7.5 billion. The firm will be headquartered in Troy, Mich., where Meritor is based. Columbus, Ind.-based Arvin makes auto exhaust systems. Meritor supplies drive-train systems and other parts. The new company will have 36,500 employees in 25 countries with 121 manufacturing locations. Under terms of the deal, shareholders of both firms will swap for stock in the new company. Arvin shareholders will get one new share plus a $2-per-share cash premium. Meritor investors will get 0.75 of a share in the new company for each of theirs. Meritor closed up 19 cents at $15.88, while Arvin slipped 94 cents to close at $23.25, both on the New York Stock Exchange.