Dana Incorporated and Eaton Corporation announced Thursday a definitive agreement to combine Dana with Eaton’s Mobility business in a Reverse Morris Trust transaction valued at approximately $5.1 billion. The boards of directors for both companies have already approved the transaction.
The deal will create a combined vehicle supplier with an enterprise value exceeding $10 billion.
Eaton's Mobility business manufactures power distribution and optimization components for traditional and electric vehicles. It holds a leading market position for commercial truck transmissions and clutches in the Americas, and supplies high-voltage electric vehicle fuses and valve actuation technologies globally.
Eaton announced in January it planned to separate its Vehicle and eMobility segments into an independent, publicly traded company. Under the terms of the agreement with Dana, Eaton will separate its Mobility Group to its shareholders through either an exchange offer or a pro rata distribution. Immediately after, Dana will merge with a subsidiary of the Mobility Group. Eaton shareholders will own at least 50.1% of the combined company, while Dana shareholders will own approximately 49.9%.
The combined company will retain the Dana Incorporated name and continue trading on the New York Stock Exchange under the ticker symbol DAN. The transaction is expected to close early in 2027.
Additionally, Eaton will receive a cash distribution of approximately $1.1 billion at closing, funded through new debt raised by the Mobility business. Companies officials said the transaction is intended to be tax-free to both Dana and Eaton shareholders for U.S. federal income tax purposes.
The $5.1 billion valuation represents approximately 8.3 times estimated 2026 pro forma adjusted EBITDA before synergies, or 5.9 times including run-rate synergies. The companies project the merger will generate $250 million in annual run-rate cost synergies within 24 months of closing.
Leadership of the combined entity will transition on July 1, 2026. R. Bruce McDonald, Dana’s current chairman and chief executive officer, will become executive chairman, focusing on integration and synergy realization. Byron Foster will assume the role of chief executive officer. Timothy Kraus will continue as chief financial officer, and Erin Rowse, Eaton’s senior vice president of human resources for industrial, will become chief human resources officer at closing.
The new board of directors will consist of all eight current Dana board members plus three directors designated by Eaton.
The merger integrates Dana’s powertrain, thermal and sealing technologies with Eaton Mobility’s commercial vehicle transmissions, clutches, engine products and electrification capabilities.
"This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions," Foster said in a statement, noting that the deal accelerates the company's 2030 strategy.
With the addition of Eaton Mobility, Dana has raised its 2030 financial targets. The company is now targeting $14 billion to $15 billion in sales, up from its previous goal of $10 billion, and adjusted EBITDA margins of approximately 18%, up from 14% to 15%. Net leverage is expected to remain at a strong 1.2 times on a pro forma 2026 estimated basis.
For Dublin-based Eaton, the divestiture allows the intelligent power management company to focus on its higher-growth, higher-margin Electrical and Aerospace segments, which align with secular trends in artificial intelligence data centers, electrification and defense spending.
"The transaction will provide substantial cash value for Eaton to deploy to our highest-growth and highest-margin opportunities," Eaton CEO Paulo Ruiz said.
