E.U. clears Cerberus Capital's $1 bln buy of Tower Automotive
BRUSSELS (MarketWatch) -- The European Commission Friday cleared Cerberus Capital Management's $1 billion purchase of Tower Automotive Inc. (TWRAQ :
tower automotive inc com
Cerberus Capital Management is a private equity company operating through an acquisition vehicle, TA Acquisition Company.
The deal's approval clears the way for Tower Automotive to emerge from more than two years in bankrupcy proceedings. The vehicle component manufacturer filed for Chapter 11 in February 2005, saying lower production volumes, rising steel prices and a complex and a large debt load had made its business unsustainable.
Under the terms of the deal Cerberus will pay a $680 million balance on the company's debtor-in-possession loan and $41 million in other loan obligations. It will also assume Tower Automotive's pension plans, which are said to require around $40 million in funding.
Tower Automotive designs and produces vehicle components for major automotive companies. Private equity firm Cerberus Capital Mangement has yet to reveal its plans for the company but has said it is looking to build a base of companies in the auto industry. It is in the process of buying Chrysler Group from DaimlerChrysler DCX, one of Tower's largest customers.
Tower Automotive has previously said it expects its sale to complete by the end of July.
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