Dana to combine with Eaton’s Mobility business

Dana Inc. has entered into a definitive agreement with Eaton Corp. plc to combine with Eaton’s Mobility business in a transaction valued at approximately $5.1 billion. The move was said to combine two complementary powertrain portfolios to create a comprehensive, differentiated leader in commercial and light vehicle markets.

The combination will integrate Dana’s global powertrain, thermal and sealing technologies with Eaton Mobility’s commercial vehicle transmissions, engine and emissions products, and advanced electrification capabilities, which Dana said will create a more comprehensive supplier serving commercial and light vehicle markets, as well as the associated aftermarket channels.

“This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions,” said Byron Foster, Dana’s incoming Chief Executive Officer. “By expanding our presence in core markets with new products and complementary technologies, we are enhancing our ability to deliver greater value to customers while strengthening margins through a more balanced portfolio and meaningful synergies. Importantly, we are bringing together highly skilled and dedicated teams whose expertise will drive our future success. This combination further accelerates the execution and expands the scope of our Dana 2030 strategy by increasing scale, deepening our aftermarket capabilities, and advancing both our traditional and electrification technologies.”

Dana Chairman R. Bruce McDonald, will serve as executive chairman of the combined company with responsibility for integration and synergy realization, and Byron Foster will serve as CEO, with both assuming their roles on July 1. Timothy Kraus will continue as Chief Financial Officer, and Eaton’s Erin Rowse, senior vice president Human Resources, Industrial, will serve as Chief Human Resources Officer at closing.

The broader leadership team will include executives from both organizations. The combined company’s Board of Directors will be comprised of all the members of Dana’s Board of Directors and three Eaton designees.

Earlier this year, Eaton said it would separate its Vehicle and eMobility segments into an independent, publicly traded company known as the Mobility Group. The move, which was to be completed by 2027, was in support of Eaton’s 2030 growth strategy, allowing the parent company to focus on its Electrical and Aerospace businesses.

“We are pleased to have reached this agreement, which delivers significant value to Eaton and its shareholders, further aligns our existing portfolio with powerful megatrends and supports Eaton’s 2030 growth strategy to lead, invest, and execute for growth,” said Paulo Ruiz, Eaton Chief Executive Officer. “Together, Eaton Mobility and Dana will create a leading and global engineering solutions partner, well positioned to serve commercial vehicle and light vehicle markets worldwide. We are incredibly proud of the reputation and credibility that our Eaton Mobility team has built, and we are confident that this highly complementary combination will drive meaningful value for customers, employees and shareholders alike.”

“This transaction meaningfully enhances our long-term financial outlook and enables us to significantly increase our Dana 2030 targets,” said Timothy Kraus, Dana’s Chief Financial Officer. “Our prior targets included approximately $10 billion in sales, 14% to 15% adjusted EBITDA margins, and a 6% adjusted free cash flow margin. With the addition of Eaton Mobility, we are now targeting $14 to $15 billion in sales, approximately 18% adjusted EBITDA margins, and an 8%-9% adjusted free cash flow margin by 2030.”

Following closing, Dana is expected to operate with expanded global scale, higher margins, broader customer coverage, and a more complete portfolio spanning mechanical systems and electrified power delivery solutions. The combined company strengthens OEM relationships across commercial and light vehicle markets, and related aftermarkets.

Last year, Dana sold its Off-Highway business to Allison Transmission Holdings Inc. in a deal worth $2.7 billion.