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CLAYTON, DUBILIER & RICE, INC. REACHES AGREEMENT TO ACQUIRE GM'S ALLISON GAS TURBINE DIVISION

 INDIANAPOLIS, Sept. 15 /PRNewswire/ -- Clayton, Dubilier & Rice, Inc. and General Motors Corporation announced a definitive agreement today under which a new company formed by the New York-based private investment firm and a group of Allison executives will acquire GM's Allison Gas Turbine Division.
 Specific terms of the agreement were not disclosed.
 The transaction is expected to close shortly. At that time, Allison Gas Turbine Division will be renamed Allison Engine Company.
 Founded in Indianapolis in 1915, Allison Gas Turbine Division is a major manufacturer of turbine engines for aerospace, industrial and marine applications. It became a division of GM in 1929 and in 1992, the company's sales were approximately $700 million.
 "Allison is a very dynamic company with an excellent market position, solid technology base and a dedicated and skilled work force," said Joseph L. Rice, III, president of Clayton, Dubilier & Rice. "Our goal is to help build an even stronger business in partnership with the company's management team while, at the same time, realizing value for our investors."
 "The sale of the Allison Gas Turbine Division is consistent with GM's continuing strategy to focus its total energies and resources on improving the competitiveness of GM's core business sectors," said William E. Hoglund, GM's executive vice president for the Corporate Affairs and Staff Support Group. "The new partnership between Clayton, Dubilier & Rice and Allison's management will allow Allison Gas Turbine to continue providing competitive products and services to customers worldwide."
 Clayton, Dubilier & Rice manages a pool of equity capital in excess of $1 billion. Since its inception in 1978, the firm has invested in 17 businesses, which have combined sales of approximately $10 billion.
 The transaction announced today is the latest in a series of management buyouts sponsored by Clayton, Dubilier & Rice involving divisions of leading U.S. corporations. In 1991, the firm organized the $1.6 billion management buyout of Lexmark International, Inc. (formerly International Business Machine Corporation's Information Products Division) in which IBM Corporation retains a 10 percent equity interest. The firm completed the purchase of The Van Kampen Merritt Companies, Inc., a mutual fund and investment advisory firm, from Xerox Corporation in February of this year.
 "As in all Clayton, Dubilier & Rice transactions, managers of the business will invest their capital to own a significant share of the new company's common stock," Mr. Rice said.
 Dr. F. Blake Wallace, who has been a General Motors vice president and general manager of Allison Gas Turbine Division since 1983, leads the team of Allison executive investors. Dr. Wallace will become president and chief executive officer of the Allison Engine Company.
 "Allison Gas Turbine has had a long, successful, and productive tenure as a division of General Motors," Dr. Wallace said, "The new Allison Engine Company is positioned for success, and I, along with Clayton, Dubilier & Rice, am enthusiastic about our new business alliance."
 -0- 9/15/93
 /CONTACT: Thomas C. Franco or John Higgins of Broadgate Consultants, Inc., 212-229-2222; Eric Dickerson of Allison Gas Turbine, 317-230-4021, or Sheila Main of General Motors, 313-556-2031/


CO: Clayton, Dubilier & Rice, Inc.; General Motors ST: Indiana IN: AUT SU:

SM -- NY003 -- 2122 09/15/93 09:54 EDT
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Publication:PR Newswire
Date:Sep 15, 1993
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