Dana Incorporated announced a definitive agreement to combine with Eaton’s Mobility business in a transaction valued at approximately $5.1 billion, creating a global powertrain systems company with an enterprise value exceeding $10 billion and estimated 2026 pro forma revenue of approximately $11 billion.
The transaction, structured as a Reverse Morris Trust, will result in Eaton shareholders owning at least 50.1% of the combined company and Dana shareholders owning approximately 49.9%. Following the close, the company will continue operating under the Dana Incorporated name and remain listed on the New York Stock Exchange. The deal is expected to close in the first quarter of 2027, subject to shareholder and regulatory approvals.
The combination brings together Dana’s powertrain, thermal, and sealing technologies with Eaton Mobility’s commercial vehicle transmissions, engine and emissions systems, and electrification technologies. The expanded portfolio will serve commercial and light vehicle manufacturers as well as aftermarket customers.
On a fully synergized basis, the combined company is expected to generate approximately $1.7 billion in adjusted EBITDA in 2026, representing a margin of about 15%. Management expects to achieve $250 million in annual run-rate synergies within 24 months after closing through purchasing efficiencies, manufacturing optimization, engineering improvements, and lower structural costs.
Dana’s updated 2030 targets now call for revenue of $14 billion to $15 billion, adjusted EBITDA margins of approximately 18%, and adjusted free cash flow margins of 8% to 9%, significantly above the company’s previous targets.
R. Bruce McDonald will serve as Executive Chairman of the combined company, overseeing integration and synergy realization, while Byron Foster will become Chief Executive Officer. Timothy Kraus will remain Chief Financial Officer. The board will include all current Dana directors along with three representatives designated by Eaton.
Following completion of the transaction, the combined company is expected to maintain a strong balance sheet with approximately 1.2 times net leverage on a fully synergized 2026 basis.
KEY QUOTES:
“This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions. 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.”
Byron Foster, Incoming Chief Executive Officer, Dana Incorporated
“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.”
Paulo Ruiz, Chief Executive Officer, Eaton Corporation
“This transaction meaningfully enhances our long-term financial outlook and enables us to significantly increase our Dana 2030 targets. 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.”
Timothy Kraus, Chief Financial Officer, Dana Incorporated
