The deal, which will create a combined powertrain supplier with around $11 billion in annual sales, is now moving towards regulatory and shareholder approvals as the companies begin preparations for integration. Dana has also provided further details on the financing, cost reductions and manufacturing efficiencies expected from the combination.
The new combined company, which will operate as Dana Incorporated, will provide drivetrain, propulsion, electrification and power management equipment for global commercial and light vehicles including combustion, hybrid and pure electric versions. The merger will provide OEMs with an expanded portfolio of drivetrain, propulsion and electrification products and services from one source.
Eaton said the business will benefit from increased scale, $250m of annual cost savings and greater diversification across customers, geographies and end markets. The business will also expand on aftermarket services, something that is part of Dana’s 2030 business strategy, alongside advancing both traditional combustion and electric vehicle technologies.
“For our customers and suppliers, there will be no change to how they currently do business with Eaton during the separation process,” said Eaton in a statement. “Combining the Mobility Group with Dana will create a larger, global engineered solutions partner with a broader product portfolio and expanded capabilities to better serve mobility customers.”
Eaton Mobility’s customers will continue to access current products while benefiting from increased scale, enhanced manufacturing, accelerated aftermarket growth and opportunities for new system integration.
Daniel Harrison, senior automotive analyst at Automotive Logistics, said: “Intense cost pressures mean that tier suppliers like Dana are under financial pressure to consolidate to help achieve economies of scale, cost reduction, enhanced purchasing power and financial resilience, which will assist on the bumpy, unpredictable and non-linear road from internal combustion engine [ICE] to electrification.”
Eaton’s decision to shed its Mobility division comes as it focuses on higher-margin electrical and aerospace markets as part of its own 2030 growth strategy. The company recently bought Ultra PCS and Boyd Thermal to strengthen its capabilities in aerospace electronic controls and liquid cooling for data centres. At the same time, Dana expects to make between $14-15 billion in revenues by 2030 thanks to the merger, up from its previous goal of around $10 billion.
Leading a global platform
On July 1 Dana’s chairman and CEO, R. Bruce McDonald moved to the role of executive chairman of the combined company with responsibility for integration. Byron Foster, who was Dana’s senior vice president and president of Light Vehicle Systems, now serves as CEO.
McDonald said: “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.”
He added that together the companies will be better positioned to serve customers, invest in innovation, and drive long-term value creation for shareholders.
Earlier this year Dana announced new business with Stellantis for the Ram Dakota programme, expanding the company's presence in the compact truck market. Dana will supply front drive units and rear axles for an all‑new vehicle platform, with production expected to begin in early 2028.
Global manufacturing base
Neither Eaton or Dana are providing details of how this spin-off and integration will impact the companies’ respective manufacturing and engineering base. Eaton Mobility has 20 global manufacturing and engineering facilities covering north and south America, Europe and Asia. Dana has around 70 manufacturing locations globally and nearly 20 technology centres.
The companies are forecasting a saving of $250m through “run-rate cost synergies” but whether that comes from consolidation of facilities or sub-tier suppliers is not clear. There are also unanswered questions about how this latest tier one tie-up will impact the existing global logistics network organisation for the two companies.
Tier one suppliers have been navigating a complex and volatile automotive supply chain since 2020 with different strategies that include focusing on new business or relinquishing divisions. Traditional suppliers of components for ICE vehicles have been trying to manage the shaky transition to EVs while also staying up with more sophisticated software content in vehicles.
In its mid-year outlook for automotive deals in the US, consultant PwC said that OEMs and tier one suppliers are realigning business to reduce geopolitical risk and hedge EV uncertainty. PwC also said that aftermarket resilience was continuing to attract capital, as noted, something forming part of Dana’s ongoing business strategy to 2030.
“Supplier portfolio reshaping remains a central theme across the automotive sector,” said PwC. “OEMs and tier ones are divesting non-core and trim-exposed operations and prioritising acquisitions of higher-margin electronics, software, power electronics and connected-vehicle capabilities.”
Supplier consolidation
In terms of divestiture and mergers, the Eaton-Dana deal is not new. Last year TI Automotive was formed from ABC Technologies purchase of TI Fluid Systems, and Axle & Manufacturing bought Dowlais Group and its subsidiaries GKN Automotive and Powder Metallurgy divisions. Schaeffler also merged with Vitesco Technologies in 2024.
According to PwC, escalating tariffs and an emphasis on localisation are affecting manufacturing and supply chain strategies across North America, particularly among OEMs and tier one suppliers seeking to reduce geopolitical and supply chain risk.
“Tariff exposure and evolving regulations are creating uncertainty around sourcing costs, pricing actions, and footprint decisions, while supplier distress is increasing risk across value chains,” said PwC.
Automotive Logistics’ Harrison added: “Procurements strategies are also evolving from simple lowest cost single-sourcing towards a variety of other sourcing models such as dual sourcing, just-in-case and even ‘China + 1’, all with the aim of increasing supply chain resilience, while keeping costs down.”
The Eaton Mobility spin off and statutory merger into Dana’s business is being structured as a Reverse Morris Trust transaction. That allows a tax-free transfer of a subsidiary which is spun off to the parent company’s shareholders. Eaton shareholders will own at least 50.1% and Dana shareholders will own approximately 49.9% of the combined company at the close of the transaction.
Dana said in its latest financial update that the transaction remains on track to close in the first quarter of 2027. Before completion, the deal still requires approval from Dana shareholders as well as the necessary regulatory clearances.
The supplier expects to file further transaction documentation and hold a special shareholder meeting ahead of closing.
