Dana Incorporated has announced more details about the sale of its Off-Highway business unit.
Dana aims to sell its Off-Highway business to Allison Transmission Holdings, Inc. for USD$2.7 billion (approximately AUD$4.1 billion).
The transaction, awaiting regulatory approvals and closing conditions, is projected to be finalised in late 2025, and represents a seven-fold increase in the earnings before interest, tax, depreciation and amortisation (EBITDA) of the Off-Highway business.
Dana Incorporated Chairman and CEO R. Bruce McDonald emphasised the sale as an imperative part of the company’s long-term direction.
“As we committed to last year, the sale of the Off-Highway business supports our strategy to become a streamlined light and commercial vehicle supplier with traditional and electrified systems,” he said.
“This transaction is a critical step in our transformation, meaningfully strengthening our balance sheet, reducing complexity in our business and allowing us to return significant capital to our shareholders.
“Combined with our ongoing USD$300 million (approximately AUD$460 million) cost-savings initiatives, this transaction enables a focused path to grow and innovate, invest in our business and continue to improve our cost structure.”
McDonald said Allison is a well-suited prospective owner of the Off-Highway business and praised its position as a market leader for drive and motion systems for off-highway vehicles and equipment.
Following the successful close of the transaction, Dana expects to generate USD $2.4 billion (approximately AUD $3.6 billion) of net cash proceeds after tax, other transaction expenses and assumed liabilities.
Dana plans to repay approximately USD$2 billion (approximately $AUD3 billion) of debt to achieve target net leverage of approximately one-fold over the business cycle.
Additionally, the Dana Board of Directors has authorised a USD $1 billion (approximately AUD$1.5 billion) capital return program through 2027 with USD$550 million (approximately AUD$842 million) of capital return to shareholders at or before closing of the transaction.
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