Eaton combines Mobility Group with Dana in $10B+ deal
Eaton combines its Mobility Group with Dana in an RMT transaction, creating a $10B+ entity. Eaton receives $1.1B cash and retains 50.1% ownership. The deal closes in Q1 2027.
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Eaton has entered into a definitive agreement with Dana Incorporated to separate and combine its Mobility Group with Dana in a Reverse Morris Trust (RMT) transaction, creating a combined company valued at over $10 billion. This strategic move marks the next step in Eaton's portfolio transformation, positioning the company to focus on its Electrical and Aerospace businesses. Upon closing, Eaton shareholders will own at least 50.1% of the combined company, and Eaton will receive a cash distribution of approximately $1.1 billion. The transaction is expected to be immediately accretive to Eaton's organic growth rate and operating margins.
The separation aligns with Eaton's 2030 growth strategy, concentrating on secular growth themes such as electrification, digitalization, AI-driven data center buildout, and aerospace aftermarket. Recent acquisitions, including Ultra PCS and Boyd Thermal, further strengthen Eaton's capabilities in aerospace electronic controls and liquid cooling for data centers. Paulo Ruiz, Eaton chief executive officer, emphasized that the transaction delivers significant value to shareholders and provides substantial cash for deployment into high-growth and high-margin opportunities.
The combined Mobility Group and Dana will operate as a global engineered solutions partner, serving commercial vehicle and light vehicle OEMs worldwide. The entity is expected to generate approximately $11 billion in pro forma revenue and $1.7 billion in pro forma estimated 2026 adjusted EBITDA. This includes $250 million of run-rate cost synergies expected to be fully realized within 24 months of closing. The combined company will benefit from increased scale, diversification, and an expanded aftermarket presence.
Transaction Details
The transaction values Eaton's Mobility Group at approximately $5.1 billion, representing a multiple of 8.3x 2026 estimated pro forma adjusted EBITDA, or 5.9x on a fully synergized basis. The structure involves Eaton separating its Mobility Group to shareholders through either an exchange offer or a pro rata distribution, followed by a merger with Dana. The cash distribution of $1.1 billion will be funded by newly-issued debt of the Mobility Group. The agreement was unanimously approved by the boards of both Eaton and Dana.
| Metric | Value |
|---|---|
| Combined company valuation | Over $10 billion |
| Eaton Mobility Group valuation | $5.1 billion |
| Eaton cash distribution | $1.1 billion |
| Pro forma revenue | $11 billion |
| Pro forma 2026 adjusted EBITDA | $1.7 billion |
| Run-rate cost synergies | $250 million |
Leadership and Closing
Byron Foster, Dana's incoming Chief Executive Officer, and Timothy Kraus, Dana's current Chief Financial Officer, will lead the combined company as CEO and CFO, respectively. R. Bruce McDonald, Dana's current Chairman and Chief Executive Officer, will serve as Executive Chairman. Dana's board will expand to include three additional directors designated by Eaton. The combined company will operate as Dana Incorporated and remain listed on the NYSE under the ticker symbol DAN. The transaction is expected to close in the first quarter of 2027, subject to Dana shareholder approval, regulatory clearances, and customary closing conditions.
How does Eaton plan to specifically deploy the $1.1 billion cash distribution to accelerate growth in its electrical and aerospace sectors?
What are the anticipated regulatory hurdles that could delay the closing of the transaction beyond the first quarter of 2027?
Will the combined Dana entity pursue further M&A activity to consolidate its position in the commercial vehicle aftermarket?
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