ArvinMeritor (NYSE: ARM), a leading global supplier of automotive components, has announced that its board of directors has approved the spin-off of its Light Vehicle Systems (LVS) business. This move will separate the LVS division from the company, while the Commercial Vehicle Systems business will remain under ArvinMeritor. The decision marks a strategic shift aimed at enhancing shareholder value and strengthening both businesses.
Chip McClure, Chairman, CEO, and President of ArvinMeritor, emphasized that the split is part of a broader strategy to focus on long-term value creation. “This move will not only benefit our shareholders but also allow both entities to become more agile, competitive, and strategically aligned with their respective markets,†he said. “The new company will be better positioned to serve its customers and capitalize on growth opportunities.â€
The newly formed entity, named Arvin Innovation, will be spun off through a tax-free dividend to existing ArvinMeritor shareholders. Once completed, shareholders will own 100% of Arvin Innovation’s common stock. The transaction does not require shareholder approval and is expected to be finalized within the next 12 months, pending regulatory and market conditions.
McClure highlighted that the spin-off aligns with the company’s 3R strategy—Rationalize, Refocus, and Regenerate—launched three years ago. “This step represents a key milestone in our transformation, enabling us to build two stronger, more focused companies,†he said.
Arvin Innovation will be led by Phil Martens, currently Senior Vice President and President of Light Vehicle Systems, who will serve as its Chairman and CEO. James Marley, a current board member, will take on the role of non-executive chairman. Meanwhile, McClure will continue as CEO of ArvinMeritor, which will maintain its headquarters in Troy, Michigan. Arvin Innovation will be based in Detroit.
The company also announced several leadership changes. Jim Donlon will transition to CFO of Arvin Innovation after the spin-off, while Jay Craig will take over as CFO of ArvinMeritor. Rakesh Sachdev, currently President of Asia Pacific, will lead emerging market development for the new company, though he will remain in his current role until a successor is appointed.
Other key executives, including Mary Lehmann and Vernon Baker, will retain their roles in ArvinMeritor, focusing on strategy, finance, legal, and human resources. The spin-off is expected to provide greater flexibility and independence for both businesses, allowing them to innovate and expand globally.
ArvinMeritor’s stock will continue to trade under the symbol ARM on the NYSE, while Arvin Innovation plans to list on the Nasdaq Global Stock Market under the ticker ARVI. The transaction is being advised by JP Morgan and UBS, with legal support from Chadbourne & Parke LLP and Miller, Canfield, Paddock and Stone, PLC.
This move reflects a significant step forward for ArvinMeritor as it restructures to meet evolving market demands and unlock long-term value for all stakeholders.
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