In an effort to strengthen its balance sheet, auto-parts supplier Meritor (NYSE:MTOR) agreed to sell the 50% stake it has in a Brazilian joint venture for $195 million in cash and other consideration.
Meritor's investment in Suspensys Sistemas Automotivos joint venture was started in 2002 and was primarily engaged in the manufacture and sale of air and mechanical suspension systems for trucks, buses, and trailers, as well as trailer axles, third axles, hubs, and drums.
Because the auto-parts supplier remains committed to its trailer business in North America and expects to continue supplying its customers in the region, Meritor Chairman, CEO, and President Chip McClure said, "We are pleased to have entered into this agreement and look forward to using the proceeds from the sale to support our continued efforts to strengthen our balance sheet."
The joint venture contributed $28 million in revenues for Meritor's fiscal 2012, down 12.5% from the year-ago period. The sale is expected to be consummated by Meritor's fiscal year end and is subject to regulatory approvals and other customary conditions.
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