Eaton is taking another decisive step in its portfolio transformation. The company has entered a definitive agreement with Dana Incorporated to separate its Mobility Group and combine it with Dana in a Reverse Morris Trust transaction. The result will be a new, combined company valued at more than $10 billion.
This separation moves Eaton closer to its 2030 growth strategy. Once the deal closes, Eaton will run a tighter, more focused portfolio centered on its Electrical and Aerospace businesses.
Those two areas sit directly in the path of major secular trends like electrification, digitalization, AI-driven data center buildouts, infrastructure modernization, aerospace aftermarket growth, and rising defense spending.
Recent acquisitions, including Ultra PCS and Boyd Thermal, sharpen that positioning by extending Eaton’s capabilities in aerospace electronic controls and liquid cooling for data centers.
The split is expected to be immediately accretive to Eaton’s organic growth rate and operating margins. Eaton plans to deploy the roughly $1.1 billion cash distribution from the transaction under its existing capital allocation framework, starting with repayment of outstanding debt.
Why combining Mobility Group and Dana makes sense
Together, Mobility Group and Dana become a scaled, global engineered-solutions partner for commercial vehicle and light-vehicle OEMs around the world.
The combined company will offer a comprehensive, complementary portfolio of drivetrain, propulsion, electrification, and power management solutions that span internal combustion, hybrid, and fully electric platforms. That portfolio is backed by strong technology capabilities and best-in-class manufacturing.
On a pro forma basis, the combined company is expected to generate approximately $11 billion in revenue and $1.7 billion in adjusted EBITDA for 2026, including run-rate synergies that should be fully realized within 24 months after closing.
The new company will benefit from increased scale, $250 million in run-rate cost synergies, and greater diversification across customers, geographies, and end markets.
It will also have a broader aftermarket presence, which should deliver more resilient revenue streams through different economic cycles.
Leadership Comments
Paulo Ruiz, Eaton chief executive officer, said, “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. 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.”
Mr. Ruiz continued, “Combining the Mobility Group with Dana creates a strong company that will be well-positioned to serve customers and support employees over the long term. We are proud of our mobility team and what they have built and are confident the combination of talent, capabilities, and technologies will create meaningful value for shareholders, customers, and employees alike.”
Bruce McDonald, Dana Chairman and Chief Executive Officer, stated, “We are excited to bring together Eaton’s Mobility Group with Dana. The addition of Mobility Group’s leading positions in commercial vehicle transmissions, clutches, and power management technologies, combined with Dana’s strengths in axles, driveshafts, electrification, thermal management, and sealing products, will create a truly differentiated global platform. Together, we will be better positioned to serve our customers, invest in innovation, and drive long-term value creation for shareholders of the combined company.”
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