Dana to merge with Eaton’s mobility business in $5.1 billion deal

Dana Inc. announced June 11 that it would merge with Eaton Corp.’s Eaton Mobility business. Under the terms of the $5.11 billion deal, Eaton shareholders will own 50.1% of the combined company, which will operate as Dana Inc. and combine Dana’s existing powertrain, thermal and sealing offerings with Eaton Mobility’s auto transmissions, engine, electrification, and other commercial and light vehicle parts.

As part of the deal, which values Eaton Mobility at $5.1 billion, Eaton will receive $1.1 billion in cash. The combined company will have an estimated $11 billion in sales in 2026, and Dana Inc. said it expected it would reap the benefits of $250 million in synergies over the next two years.

Paulo Ruiz, the current CEO of Eaton, noted the deal would generate positive value for his company: The company announced its intention to sell off the underperforming mobility unit in January. In a January statement, Ruiz said the spinoff would allow Eaton to sharpen its focus on its electrical and aerospace offerings instead.

What people are saying

"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 CEO. "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."

Paulo Ruiz, Eaton CEO, said, "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. 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 CFO. "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. Importantly, after funding the approximately $1.1 billion cash distribution to Eaton, we expect to maintain a strong balance sheet with approximately 1.2x net leverage on a pro forma 2026 estimated basis, supporting continued investment and disciplined capital allocation."