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July 4, 2007

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Carlyle Group and Onex reached agreement to buy GM’s Allison Transmission

General Motors Corp. announced that it has reached a definitive agreement for the company to sell its Allison Transmission (Allison) commercial and military business to The Carlyle Group (Carlyle) and Onex Corporation (Onex) for approximately $5.6 billion.

The Allison 1000 MW7 Six Speed Automatic Transmission

The sale agreement covers substantially all of Allison Transmission, including seven manufacturing facilities in Indianapolis, Ind. and its worldwide distribution network and sales offices. The production facility in Baltimore, Md. is dedicated to the production of conventional and hybrid 2MODE transmissions used in GM's retail pick-up trucks and SUVs and will remain with GM. The transaction is structured to preserve GM's and Allison's competitive strengths in their respective product lines and is expected to close as early as the third quarter of this year pending union and regulatory approval.

"This is another important step to strengthen our liquidity and provide resources to support our heavy investments in new products and technology," said Rick Wagoner, GM chairman and CEO. "At the same time, this sale will position Allison for growth with strong partners in Carlyle and Onex, which have well-established track records of working effectively with their management teams, unions and employees," Wagoner went on to say.

Seth Mersky, managing director of Onex said, "We believe Allison is poised for excellent growth in its sector with the increasing rate of adoption of automatic transmissions in commercial vehicles both in North America and abroad. Allison's exceptional reputation for product quality and reliability, its strong brand and talented management team provide it with a competitive advantage that will allow the company to capture that growth."

Carlyle managing director Greg Ledford said, "We are excited to partner with Onex, the Allison management team and employees as we grow this iconic brand and support its transition to a stand-alone business."

Allison Transmission is the leading designer and manufacturer of automatic transmissions for medium and heavy duty commercial vehicles. Its products are used in on-highway, off-highway and vehicles. Headquartered in Indianapolis, Indiana, Allison Transmission employs approximately 3,400 people, has seven plants in Indianapolis and sells its transmissions through a worldwide distribution network with sales offices in North America, South America, Europe, Africa and Asia. The company generates annual revenues in excess of $2 billion.

Photos: Allison Transmission

(June 28, 2007)

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