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Eaton to Merge Mobility Business With Dana in $10B Deal
Separation Will Allow Eaton to Focus on Electrical, Aerospace Businesses
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Key Takeaways:
- Eaton Corp. agreed June 11 to merge its mobility business with Dana Inc., creating a combined company valued at about $10 billion including debt.
- The deal will combine Eaton’s commercial vehicle and emissions products with Dana’s powertrain and thermal technologies, while Eaton refocuses on higher-growth electrical and aerospace segments.
- Eaton shareholders will own just over half of the new company and receive about $1.1 billion in cash, with Dana investors holding the remaining stake.
Eaton Corp. agreed to merge its mobility business with Dana Inc. in a deal valuing the combined company at roughly $10 billion including debt.
The separation of the division will allow Eaton to focus on its electrical and aerospace businesses, which are benefiting from trends including the AI-driven data center boom, the power management company said June 11.
The merger of the business with auto supplier Dana will put together its commercial vehicle transmissions, engine and emissions products with the auto supplier’s powertrain, thermal and sealing technologies, Dana said. Dana is also targeting $250 million in cost savings from the transaction, which helps lower the implied valuation.
Shareholders of Eaton will own just over half of the company, with Dana shareholders owning the rest.
Eaton will receive a cash distribution of approximately $1.1 billion, subject to certain adjustments.
Eaton had previously announced plans to spin off its mobility arm.
The price paid by Dana for the business is about $1.5 billion higher than what Barclays Plc analyst Julian Mitchell estimates it could have been valued at in the public markets, according to a research note June 11.
Eaton’s vehicle and EV operations have been a drag on its overall growth and clouded its appeal as a beneficiary of the data center buildout, with the stock lagging the performance of more focused peers.
Eaton rose 2% to $383.06 at 11:21 a.m. in New York trading June 11, giving the company a market value of about $149 billion. Dana fell 10% to $31.89, for a market value of about $3.5 billion.
Dana sold its off-highway business to Allison Transmission Holdings Inc. for $2.7 billion in a deal that closed in January.
Written by Jamie Nimmo, Brooke Sutherland and David Carnevali
