Dana Incorporated and Eaton Mobility Group will combine into a $10 billion parts company. The companies announced the merger on Thursday.
As part of the deal, Eaton shareholders will own at least 50.1% of the new company and Dana shareholders will own 49.9%. Eaton will receive a cash distribution of $1.1 billion, subject to adjustments for cash and indebtedness.
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"This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions," says Byron Foster, Dana's incoming CEO. Dana Chairman R. Bruce McDonald will serve as executive chairman of the combined company, responsible for integration and synergy realization. Foster and McDonald will start their roles July 1.
Timothy Kraus will continue as CFO and Eaton's Erin Rowse, senior vice president for human resources, industrial, will become chief human resources officer. The leadership will also pull from executives from both organizations, the companies say. The company's board will include all of Dana's board of directors, plus three Eaton designees.
The new company 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. It creates a comprehensive supplier serving both commercial and light vehicle markets and the aftermarket, the companies say.
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"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," Foster says. "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."
The combined company is projected to have $11 billion in sales and about $1.7 billion adjusted EBITDA. It's valued at more than $10 billion.
"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," says Paulo Ruiz, Eaton CEO. "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."
