Power management company Eaton has announced a new $5 billion agreement with drivetrain supplier Dana that will see Eaton’s mobility group combined with the latter.
The transaction will see Eaton separate and combine its mobility group with Dana in a move that will create a combined company valued at more than $10 billion.
The transaction, which is expected to close in the first quarter of 2027, will see Dana’s incoming CEO Byron Foster lead the combined company alongside Dana CFO Timothy Kraus.
Eaton senior vice president human resources of industrial will serve as the combined company’s chief human resources officer upon the close of the deal.
The combined company’s senior management team will include representatives from both companies and will be announced as integration planning progresses. R. Bruce McDonald, Dana’s current chairman and CEO, will serve as executive chairman of the combined company.
The combined company will operate as Dana Incorporated and will continue to be listed on the NYSE under the ticker symbol.
The separation of Eaton’s mobility group marks the next step in its ongoing portfolio transformation, allowing Eaton to operate a more focused portfolio concentrated on its electrical and aerospace businesses.
The recent acquisitions of Ultra PCS and Boyd Thermal further strengthen the company’s strategic positioning, extending Eaton’s capabilities in aerospace electronic controls and liquid cooling for data centres.
Eaton is expecting to deploy the approximately $1.1 billion cash distribution from the transaction consistent with its existing capital allocation framework and priorities, including repayment of outstanding indebtedness.
“We are pleased to have reached this agreement, which delivers significant value to Eaton and its shareholders, and represents a major milestone in Eaton’s 2030 growth strategy to lead, invest and execute for growth,” Eaton CEO Paulo Ruiz says.
“Eaton shareholders will benefit from the meaningful upside created by the combined company, and the transaction will provide substantial cash value for Eaton to deploy to our highest-growth and highest-margin opportunities. Looking ahead, our portfolio will be closely aligned with the powerful megatrends driving generational growth in our Electrical and Aerospace businesses, and we look forward to continuing our momentum to drive meaningful value for our customers and shareholders.”
Ruiz says the combined mobility group and Dana will be a scaled, global engineered solutions partner, well-positioned to serve commercial vehicle and light vehicle OEMs worldwide.
Together, the combined company will offer a comprehensive and complementary portfolio of drivetrain, propulsion, electrification and power management solutions spanning internal combustion, hybrid and fully electric platforms to commercial vehicle and automotive OEMs, supported by comprehensive technology capabilities and best in class manufacturing capabilities.
The combined company expects to generate approximately $11 billion in pro forma revenue and $1.7 billion in pro forma estimated 2026 adjusted EBITDA.
Ruiz says the combined company will benefit from increased scale, $250 million of run-rate cost synergies and greater diversification across customers, geographies and end markets. It will also have an expanded aftermarket presence, which is expected to deliver more resilient revenue streams across economic cycles.
“Combining the mobility group with Dana creates a strong company that will be well-positioned to serve customers and support employees over the long term,” Ruiz says.
“We are proud of our mobility team and what they have built and are confident the combination of talent, capabilities and technologies will create meaningful value for shareholders, customers and employees alike.”