Dana & Eaton Mobility Merge in US$10bn+ Auto Supply Deal

Dana Incorporated has announced an agreement to combine with Eaton's Mobility Business. Both companies are US headquartered, major manufacturers, supplying the automotive and commercial vehicle sectors. 

The deal values Eaton Mobility at approximately US$5.1bn and the combined company at more than US$10bn in enterprise value.

Historically, Dana and Eaton have been competitors in the automotive components market, now that rivalry is set to end in a merger which is expected to close in 2027. 

Byron Foster, Dana's incoming Chief Executive Officer, says: “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.”

Eaton and Dana’s combined company

Dana says the combination will integrate its powertrain, thermal and sealing technologies with Eaton Mobility's commercial vehicle transmissions, engine and emissions products and advanced electrification capabilities.

The transaction is structured as a Reverse Morris Trust, a financial manoeuvre that minimises tax, with Eaton shareholders owning at least 50.1% and Dana shareholders owning approximately 49.9% of the combined company at close. Under the terms, Eaton will receive a cash distribution of approximately US$1.1bn.

In a press release, the companies say that the combined company will benefit from increased scale, US$250m of run-rate cost synergies and greater diversification across customers, geographies and end markets.

A shocking major merger

The news of the two competing companies merging has come as a shock to most. An SEC filing shows that on 11 June, Antonio Galvao, President Mobility Group of Eaton Corporation, wrote to employees: “I appreciate that the news may feel surprising. 

“As we move forward in the planning process to combine the companies, which we expect to complete in Q1 2027, we will continue to learn more about one another’s organisations and the significant opportunities that exist because of our collective strengths.”

Antonio added in the email that the new company’s senior management will have leadership from Eaton and Dana.

Despite being rivals in the automotive components sector, the car component makers have collaborated before under the RoadRanger brand, a marketing venture that was dropped in the early 2010s. 

Eaton focused on electrical and aerospace products

Eaton will separate and combine its Mobility Group with Dana as part of the transaction. Upon closing, Eaton says it will operate a more focused portfolio concentrated on its Electrical and Aerospace businesses.

Paulo Ruiz, Eaton’s Chief Executive Officer, says: "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."