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IMPORTANT TAX INFORMATION FOR
FORMER MERITOR SHAREHOLDERS
(Please Retain For Your Records)
Meritor Automotive, Inc. ("Meritor") merged
into ArvinMeritor, Inc. ("ArvinMeritor") on July 7, 2000
with each Meritor shareholder receiving .75 shares of ArvinMeritor
common stock in exchange for each share of Meritor common stock.
Tax consequences to former Meritor shareholders
Based on opinions received from Chadbourne & Parke
LLP and Wachtell, Lipton, Rosen & Katz, your receipt of
ArvinMeritor common stock in exchange for Meritor common stock was
tax-free for U.S. federal income tax purposes, although you will
recognize taxable gain or loss with respect to any cash received in
lieu of fractional shares of ArvinMeritor. The taxable gain or loss
will be equal to the difference between the cash you receive and your
tax basis (determined as described below) in such fractional share.
Your gain or loss will be capital (assuming your fractional share was
held as a capital asset) and will be long-term if the holding period
for your shares of ArvinMeritor common stock (which includes your
holding period for your Meritor common stock as described below) as of
the date of sale of such fractional share is greater than one year.
See "Fractional share examples", below.
Tax basis of ArvinMeritor stock
The aggregate tax basis of the shares of ArvinMeritor
common stock you received in the merger (including any fractional
shares) is equal to the aggregate tax basis of the shares of Meritor
common stock you surrendered in exchange for that stock. The following
example illustrates the per share tax basis computation, taking into
account the exchange ratio of .75 shares of ArvinMeritor common stock
for each share of Meritor common stock:
Holding period of ArvinMeritor stock
The holding period of each share of ArvinMeritor
common stock you received in the merger (including any fractional
shares) includes your holding period for the Meritor common stock you
surrendered in exchange for that stock.
Fractional share examples
Statement in tax return
U.S. Treasury regulations require you to attach to
your 2000 U.S. federal income tax return a signed statement setting
forth certain prescribed information about the merger of Meritor and
ArvinMeritor. For this purpose, we are enclosing a suggested
form of statement that you may complete and attach to your 2000
U.S. federal income tax return. This form requires Adobe
Acrobat Reader.
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The information in this letter represents our
understanding of existing U.S. federal income tax law and regulations
and does not constitute tax advice. It does not purport to be complete
or to describe tax consequences that may apply to particular
categories of shareholders. You should consult a tax advisor as to the
particular consequences to you of the transaction under U.S. federal,
state and local tax laws and foreign tax laws, including the effect of
possible changes in tax laws that may affect the description set forth
above.
If you have any questions about your ArvinMeritor
common stock, please contact our transfer agent EquiServe Trust
Company at 1-800-519-3111.
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