TROY, Mich. (AP) -- ArvinMeritor Inc., which makes parts for commercial and light vehicles, said Tuesday its board has approved a plan to spin off its light vehicle systems business to shareholders.
The planned spinoff of the business, which will be named Arvin Innovation Inc., will be done through a pro rata tax-free dividend to ArvinMeritor shareholders. The shareholders will own 100 percent of the new company's common stock. Approval by shareholders is not required.
ArvinMeritor said it expects to complete the spinoff within the next 12 months.
Phil Martens, ArvinMeritor's senior vice president and president of light-vehicle systems, will become the president and chief executive of Arvin Innovation. Director James Marley will become the new company's nonexecutive chairman. Chip McClure will remain chairman, president and CEO of ArvinMeritor.
Jim Donlon, executive vice president and chief financial officer of ArvinMeritor, will take on those roles at Arvin Innovation. Jay Craig, senior vice president and controller of ArvinMeritor, will replace Donlon, effective immediately, the company said.
Additionally, when the spinoff is complete, Carsten Reinhardt, senior vice president and president of the commercial vehicle systems business, will be named chief operating officer of ArvinMeritor.
The new company will be based in Detroit and will employ about 9,000 people at 42 facilities in 16 countries. The light-vehicle systems business had sales of $2.2 billion in 2007.
ArvinMeritor's stock will continue to trade on the New York Stock Exchange under the symbol ''ARM,'' while Arvin Innovation shares are expected to trade on the Nasdaq Global Market under the symbol ''ARVI.''
