Dana Incorporated has entered a definitive agreement with Eaton Corporation to merge into one global powertrain leader focused on commercial and light vehicles.
Eaton will separate and combine its Mobility Group with Dana in a Reverse Morris Trust transaction – creating a combined company valued at more than $10 billion USD (approx. $14.18 billion AUD).
Under the terms of the agreement, Eaton shareholders will own at least 50.1 per cent and Dana shareholders approximately 49.9 per cent of the combined company at close.
Eaton will also receive a cash distribution of approximately $1.1 billion USD (approx. $1.56 billion AUD), subject to adjustments for cash and indebtedness.
Dana Chairman, R. Bruce McDonald, will serve as Executive Chairman of the combined company with responsibility for integration and synergy realisation.
Byron Foster will serve as Chief Executive Officer, with both assuming their roles on 1 July 2026.
Foster said the transaction merges two highly complementary powertrain portfolios to create a comprehensive, differentiated leader in commercial and light vehicle markets.
“This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions,” he said.
“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.”
Timothy Kraus will continue as Chief Financial Officer at Dana, while Eaton Senior Vice President Human Resources, Industrial, Erin Rowse, will serve as Chief Human Resources Officer at closing.
The broader leadership team will include executives from both organisations, with the combined company’s Board of Directors to be comprised of all the members of Dana’s Board of Directors and three Eaton designees.
“We are pleased to have reached this agreement, which delivers significant value to Eaton and its shareholders and represents a major milestone in Eaton’s 2030 growth strategy to lead, invest and execute for growth,” said Eaton Chief Executive Officer, Paulo Ruiz.
“Eaton shareholders will benefit from the meaningful upside created by the combined company, and the transaction will provide substantial cash value for Eaton to deploy to our highest-growth and highest-margin opportunities.
“Looking ahead, our portfolio will be closely aligned with the powerful megatrends driving generational growth in our Electrical and Aerospace businesses, and we look forward to continuing our momentum to drive meaningful value for our customers and shareholders.”
Dana is expected to operate with expanded global scale, higher margins, broader customer coverage and a more complete portfolio spanning mechanical systems and electrified power delivery solutions.
The combined company will also strengthen OEM relationships across commercial and light vehicle markets and related aftermarkets.
The transaction values Eaton Mobility at $5.1 billion USD (approx. $7.24 billion AUD) on a cash-free, debt-free basis, representing approximately 5.9x fully synergised estimated 2026 pro forma adjusted EBITDA.
“This transaction meaningfully enhances our long-term financial outlook and enables us to significantly increase our Dana 2030 targets,” said Kraus.
“Our prior targets included approximately $10 billion [USD] in sales, 14 per cent to 15 per cent adjusted EBITDA margins and a six per cent adjusted free cash flow margin.
“With the addition of Eaton Mobility, we are now targeting $14 to $15 billion [USD] in sales, approximately 18 per cent adjusted EBITDA margins, and an eight to nine per cent adjusted free cash flow margin by 2030.
“Importantly, after funding the approximately $1.1 billion [USD] 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.”
