In support of strong investor interest in its combination with GKN Driveline, Dana Incorporated (NYSE: DAN) announced today that it has improved the terms of its agreed combination and will also double the size of its share repurchase program.
- Dana has increased the cash element of consideration by $140 million (£100 million), representing an 8.6 percent increase in the cash consideration and delivering further value to GKN shareholders.
- Dana will double the size of its share repurchase program to $200 million (£145 million). The company expects to use its share repurchase program to support liquidity in all markets for Dana shares following the merger.
As a result, the total cash consideration is approximately $1.77 billion (£1.28 billion), along with the assumption of approximately $1.0 billion (£700 million) of IAS 19 net pension liabilities, and approximately 133 million new Dana plc shares issued to GKN’s shareholders. As agreed previously, upon completion of the transaction, Dana plc will be registered in the U.K., and the shares will be listed on both the London Stock Exchange and the New York Stock Exchange, allowing GKN shareholders to benefit from the significant value creation a Dana-GKN Driveline combination will provide.
Jonathan Collins, executive vice president and chief financial officer of Dana, said: “Today’s announcement demonstrates our support for investors following a series of productive meetings where the many benefits of the combination have become ever more apparent. We are clearly enhancing the superior value this combination offers to GKN shareholders. This strategic transaction is driven by powerful industrial logic and offers a unique opportunity for shareholders to participate in the creation of a global leader in vehicle drive systems and electric propulsion.
“The increase in our share repurchase program illustrates further confidence in our ability to unlock the value of this combination, including $235 million (£174 million) of synergies available only as a result of this transaction, as well as the delivery of a successful integration that has the support of investors, employees, pension trustees, and a global customer base.”
Dana plans to repurchase its shares in the open markets or through privately negotiated transactions funded through continued cash generation and liquidity. Pursuant to this program expiring December 31, 2019, the purchase of shares is subject to prevailing market conditions, available growth opportunities, and other considerations.