The US-based Dana Corporation, one of the world's leading suppliers for the automotive industry, has signed an agreement to purchase a majority stake in Slovak bushing and engine bearing manufacturer Tribometal Dolny Kubin. The deal was officially sealed on February 29, when Dana - whose 1999 sales totalled more than $13.2 billion - purchased 82.3% of Tribometal shares at 809 Slovak crowns per share.
The takeover was touted as benefical to both parties, as Dana Corporation aspired to establish a foothold in the European automotive supplier market while Triobmetal was looking to branch out globally.
Vladimir Chydil, financial and personnel director for Tribometal, said his business had been actively negotiating with Dana for about a year before the official signing. The fit was perfect according to Chydil, as his company's operations had been limited by its small size. With the presence of Dana, this would no longer pose a problem.
"It's a trend now in the world - bigger concentration and globalisation," he said. "We wanted to be involved with a global player, and saw this [deal] as necessary and positive for the growth of the company. We are quite pleased with the acquisition."
Jeff Cole, a Dana Corporation spokesman from the firm's headquarters in Ohio, said the deal gave Dana a stronger presence in the eastern European market. This is the second venture into the region in the past few months for Dana, as it recently acquired a filtration operation in Poland.
Tribometal's ambition to create an industrial base to supply automotive manufacturers throughout Europe fits neatly into Dana's stated mission to have at least one of its components in every automobile manufactured around the world.
"Dana wants to be wherever its customers are, and many times we want to be where the customers are going to be before they get there, and this is one way to accomplish that," Cole said. "This is a perfect example of something that's a real fit for us in terms of our product line without having to establish new facilities."
Tribometal is currently a main supplier of bearings for Volkswagen in Slovakia and Škoda in the Czech Republic.
Dana's Cole said that Tribometal's production would be expanded to include industrial components, but he could not comment on projected revenues or specific plans for increased output or distribution for the Tribometal plant.
Dana Corporation said that they were cautious when contemplating buying out a company. The company used a conservative model to judge prospective take-overs. Prospective growth opportunities, Cole said, must be financially sound and must add to profit immediately in order to qualify.
With 1999 sales of $7.5 million, Tribometal also boasted accolades such as winning Škoda's Quality Prize three years in a row, as well as being rated among the top 63 global suppliers by Volkswagen last year - thus, the stability of Tribometal was in question.
Tribometal Dolný Kubín produces 60% of its goods for export, including Italy, Germany and the United States. Its slide bearings, used in internal combustion engines, are employed almost exclusively by Czech and Slovak automotive plants.
Based in Ohio, Dana Corporation is one of the world's leading independent suppliers to the automotive industry. The company operates more than 300 facilities in 32 countries and employs more than 84,000 people worldwide.