Eaton Mobility Merges
Eaton to Spin Off Mobility Business, Merge It with Dana in $5.1 Billion Deal
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Key Points
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Eaton described its Mobility business as a supplier of power distribution and optimization components for both traditional and electric vehicles, citing a “leading market position” for commercial truck transmissions and clutches in the Americas and global supply of “high-voltage electric vehicle fuses and valve actuation technologies.”
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The companies said their boards had already approved the transaction, before moving to closing subject to regulatory and shareholder approvals.
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The deal was framed as building a pro forma company with about $11 billion in sales, and the $5.1 billion Mobility valuation equated to roughly 8.3x estimated 2026 pro forma adjusted EBITDA (before synergies) and 5.9x including run-rate synergies.
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Eaton noted the transaction builds on its earlier January plan to separate its Vehicle and eMobility segments into a standalone, publicly traded company before combining Mobility with Dana under the Reverse Morris Trust structure.
Eaton and Dana announced a $5.1 billion deal on June 11 to merge Eaton's Mobility business with Dana, creating a powertrain giant with more than $10 billion in enterprise value and about $11 billion in pro forma annual sales, according to Business Wire. The combined company will keep the Dana name and trade on the NYSE under the ticker DAN, with the deal expected to close in early 2027.
Eaton CEO Paulo Ruiz called the deal a "portfolio transformation" that lets Eaton sharpen its focus on "higher growth, higher margin Electrical and Aerospace businesses." Eaton will walk away with a $1.1 billion cash payment funded by new debt the Mobility unit takes on at closing, per Business Wire.
How the Reverse Morris Trust Deal Actually Works
The deal uses a structure called a Reverse Morris Trust, or RMT. Eaton first spins off its Mobility Group into a separate company. It then distributes shares of that new company to Eaton shareholders. After that, Dana merges with the Mobility unit. The result: Eaton shareholders own at least 50.1% of the new Dana, while existing Dana shareholders own about 49.9%, according to Seeking Alpha.
The RMT structure is designed to be tax-free for U.S. shareholders on both sides. Eaton's boards approved the agreement on June 10, one day before the public announcement, per citybiz.co. Dana shareholders still need to vote to approve the deal, and global antitrust regulators must sign off before it can close.
$250 Million in Synergies Targets Electrification Scale
The companies project $250 million in annual cost savings within 24 months of closing. Those savings are expected to come from shared manufacturing and combined purchasing power. The $5.1 billion Mobility valuation works out to 8.3x estimated 2026 EBITDA before synergies — dropping to 5.9x once those savings are included, according to Investing.com.
Eaton's Mobility unit brings high-voltage EV fuses, valve actuation technologies, and a leading position in commercial truck transmissions and clutches in the Americas. Dana adds axles, drivelines, and thermal management. Together, the combined company aims to be a single supplier for automakers navigating the shift from gas engines to electric drivetrains, per TipRanks.
Eaton Bets on Data Centers by Shedding Auto Parts
The deal is the latest step in Eaton's multi-year push to exit cyclical automotive markets. Since 2020, Eaton sold off its Lighting and Hydraulics businesses. Now it is shedding Mobility to double down on power management for AI-driven data centers and aerospace, per TipRanks. Eaton shares rose 3.3% in premarket trading after the announcement.
Eaton announced in January 2026 that it planned to spin out its Vehicle and eMobility segments as a standalone public company. The Dana deal replaces that plan with a larger, fully merged outcome. Eaton expects the transaction to immediately lift its operating margins and organic growth rate once Mobility is off its books, according to Business Wire.
New Dana Eyes $14–$15 Billion in Sales by 2030
The new Dana will be headquartered in Maumee, Ohio. Byron Foster, who takes over as Dana CEO on July 1, 2026, called the transaction a "milestone" that positions Dana as a "leading, scaled provider of powertrain solutions," per Investing.com. R. Bruce McDonald will serve as Executive Chairman and lead integration efforts.
The combined company has raised its 2030 revenue target to $14–$15 billion, up from a prior goal of $10 billion, and is aiming for an 18% EBITDA margin, according to Business Wire. The net leverage ratio at closing is expected to be just 1.2x pro forma 2026 EBITDA, giving the new Dana room to invest through the EV transition.
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