Eaton Corporation PLC said Thursday that it has entered into a definitive agreement to merge its Mobility Group with Dana Incorporated through a Reverse Morris Trust transaction valued at in excess of $10 billion. The announcement came as Eaton shares climbed 2.8% in premarket trading and Dana shares fell 7.1% premarket.
Deal mechanics and immediate cash
The transaction places an approximate valuation of $5.1 billion on Eaton’s Mobility Group. Under the deal structure, Eaton shareholders will own no less than 50.1% of the combined business. Eaton also will receive a cash distribution of about $1.1 billion prior to closing, funds the company says it intends to apply in line with its capital allocation framework, including for debt reduction.
Why Eaton is separating Mobility
Eaton framed the separation as a move to sharpen its strategic focus on its Electrical and Aerospace segments. The company noted those businesses align with a set of growth trends it identified: electrification, digitalization, AI-driven data center buildout, infrastructure modernization, and defense spending. Eaton said the transaction is expected to be immediately accretive to its organic growth rate and operating margins once it closes, which the company currently anticipates will occur in the first quarter of 2027.
Projected scale and synergies for the combined mobility business
The combined Mobility Group and Dana entity is projected to deliver roughly $11 billion in pro forma revenue and an estimated $1.7 billion in pro forma adjusted EBITDA for 2026. That figure includes an expected $250 million of run-rate cost synergies, which the companies say should be fully realized within 24 months after closing.
Leadership and listing
Leadership of the combined company will be led by Byron Foster, who is named as incoming chief executive officer, with Timothy Kraus serving as chief financial officer. R. Bruce McDonald, Dana’s current chairman and chief executive officer, will transition to the role of executive chairman. The combined business will operate under the Dana Incorporated name and remain listed on the New York Stock Exchange under the ticker symbol DAN.
Structure, approvals and timeline
The transaction is structured as a Reverse Morris Trust. Eaton will first separate its Mobility Group through either an exchange offer or a pro rata distribution, after which Dana will merge with a subsidiary of the separated Mobility Group. The closing remains contingent on approval by Dana shareholders and obtaining required regulatory clearances.
Market reaction
Investors reacted quickly to the announcement: Eaton stock rose 2.8% in premarket trading on the day of the announcement, while Dana shares declined 7.1% premarket.
This transaction creates a standalone, larger mobility supplier in the form of the combined Mobility Group and Dana, while repositioning Eaton to concentrate on businesses the company says are aligned with secular growth trends.