Meritor In $500 Million Eaton Settlement; Sees $209 Million Net Proceeds

Benzinga

Meritor (NYSE: MTOR) on Monday reached a $500 million settlement with Eaton (NYSE: ETN) related to an anti-trust suit filed in 2006.

The news sent Meritor down more than 13 percent to $1.9 per share.

Meritor had been slated to go to trial beginning Monday over damages that reportedly could have amounted to more than $2 billion. The company won its antitrust suit concerning the marketing of truck transmissions against Eaton in 2009.

Meritor, with revenue of $3.7 billion, said net proceeds from the settlement will amount to $209 million and will "prefund" pension plans in the U.S. and U.K.

The agreement is one of the largest private, anti-trust settlements of the past 10 years and avoids the risk of a jury trial over damages that had been slated to start Monday, Meritor said.

Meritor also unveiled a $201 million share buyback tied to debt reduction goals and expected to launch in 2015.

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