Dana to merge with Eaton Mobility in $5.1B deal

Dana Incorporated has entered into a definitive agreement to combine with Eaton Corporation plc’s Mobility business in a transaction valued at approximately $5.1 billion. The valuation for Eaton Mobility is on a cash-free, debt-free basis and reflects about 8.3 times estimated 2026 pro forma adjusted EBITDA before synergies, or about 5.9 times including anticipated run-rate synergies.

The combination will unite two powertrain portfolios that serve commercial and light vehicle markets. The companies characterize the businesses as highly complementary, positioning the combined enterprise as a more comprehensive provider within these segments.

The deal is structured as a Reverse Morris Trust. Eaton will first separate its Mobility Group to its shareholders through either an exchange offer or a pro rata distribution, at Eaton’s election. Immediately after this separation, Dana will merge with a subsidiary of the Mobility Group, with Dana surviving as a wholly owned subsidiary of the Mobility Group.

Upon closing, existing Eaton shareholders will own at least 50.1% of the combined company’s shares, while Dana shareholders will own approximately 49.9%. The combined company will continue to operate under the Dana Incorporated name and will retain its listing on the New York Stock Exchange.

On a fully synergized, pro forma 2026 estimated basis, the combined company is expected to generate approximately $11 billion in sales. Adjusted EBITDA is projected at about $1.7 billion under the same assumptions.

The transaction is expected to deliver approximately $250 million of annual run-rate synergies within 24 months following closing. These synergies are planned to come from reduced structural costs, greater purchasing scale, manufacturing optimization, and engineering efficiencies across the combined operations.

In connection with the transaction, Eaton is expected to receive a cash distribution of approximately $1.1 billion, subject to adjustments for cash and indebtedness. This payment is to be funded through new debt raised prior to closing.

By structuring the transaction on a cash-free, debt-free basis for Eaton Mobility and using new debt to fund the distribution, the parties set out a defined capital allocation for the combined enterprise at closing. Specific post-closing leverage metrics are not detailed in the available information.

Following completion of the merger steps, Dana’s Chairman, R. Bruce McDonald, will serve as Executive Chairman of the combined company with responsibility for integration and synergy realization. Byron Foster will serve as Chief Executive Officer. Timothy Kraus will continue as Chief Financial Officer, and Eaton’s Erin Rowse will serve as Chief Human Resources Officer at closing.

The transaction is expected to be tax-free to Dana and Eaton shareholders for U.S. federal income tax purposes. Closing is targeted for the first quarter of 2027 and remains subject to approval by Dana shareholders, receipt of required regulatory approvals, and other customary closing conditions.