Eaton said Wednesday it will separate its mobility group and combine it with Dana Incorporated in a reverse Morris trust transaction that values the combined company at more than $10 billion and Eaton’s mobility business at about $5.1 billion.
Under the deal, Eaton expects to receive about $1.1 billion in cash, while Eaton shareholders will own at least 50.1% of the combined company. The transaction is expected to close in the first quarter of 2027.
Eaton said the combined mobility business and Dana would generate about $11 billion in pro forma revenue and $1.7 billion in pro forma estimated 2026 adjusted EBITDA, including $250 million in run-rate synergies. Eaton said those synergies are expected to be fully realized within 24 months after closing.
The $5.1 billion valuation for Eaton’s mobility group implies 8.3 times 2026 estimated pro forma adjusted EBITDA, or 5.9 times on a fully synergized basis.
The company said the separation would be immediately accretive to Eaton’s organic growth rate and operating margins once the deal closes. Eaton also said it plans to use the $1.1 billion cash distribution in line with its capital allocation priorities, including debt repayment.
After the transaction, Eaton will be more concentrated in electrical and aerospace businesses. The company said recent acquisitions of Ultra PCS and Boyd Thermal strengthen its aerospace electronic controls and liquid cooling capabilities for data centers.
The combined company will continue under the Dana Incorporated name and ticker symbol DAN. Byron Foster, Dana’s incoming chief executive officer, will lead the combined company as CEO, and Timothy Kraus will serve as CFO. R. Bruce McDonald will be executive chairman. Eaton will add three directors to Dana’s eight-member board. Following these announcements, the company's shares moved 1.05%, and are now trading at a price of $379.40. For more information, read the company's full 8-K submission here.
