Eaton to Separate Mobility Group in $10B Deal

By Hao Liu • Thursday, June 11 16:52 • Permanent Link

Eaton said it will separate its mobility group and combine it with Dana in a reverse Morris trust deal that values the combined company at more than $10 billion and Eaton’s mobility business at about $5.1 billion.

Under the agreement announced June 11, Eaton expects to receive a cash distribution of about $1.1 billion before the transaction closes, which is targeted for the first quarter of 2027. Eaton shareholders are set to own at least 50.1% of the combined company.

The combined mobility business is expected to generate about $11 billion in pro forma revenue and $1.7 billion in pro forma estimated 2026 adjusted EBITDA, including $250 million of run-rate synergies expected to be fully realized within 24 months after closing.

Eaton said the deal should be immediately accretive to its organic growth rate and operating margins when it closes. The company said it will use the $1.1 billion cash distribution in line with its capital allocation priorities, including debt repayment.

The transaction gives Eaton a more focused portfolio centered on electrical and aerospace businesses. Eaton said those businesses are tied to electrification, digitalization, AI-driven data center expansion, infrastructure modernization, aerospace aftermarket demand and defense spending.

The mobility group’s valuation implies 8.3 times 2026 estimated pro forma adjusted EBITDA, or 5.9 times on a fully synergized basis. Eaton said the combined company will have greater scale, broader customer and geographic diversification, and an expanded aftermarket presence.

Byron Foster, Dana’s incoming chief executive, and Timothy Kraus, Dana’s current chief financial officer, will lead the combined company as CEO and CFO. R. Bruce McDonald will serve as executive chairman. Dana’s board will be expanded by three directors designated by Eaton, including one current Eaton executive and two current Eaton directors.

The combined company will keep the Dana Incorporated name and continue trading on the New York Stock Exchange under the ticker DAN. Eaton said its 2025 revenue was $27.4 billion. Following these announcements, the company's shares moved 5.27%, and are now trading at a price of $395.23. For the full picture, make sure to review Eaton Corp's 8-K report.

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