Drivetrain specialist Dana Inc. is acquiring the Eaton Mobility business in a $5.1-billion deal that the two companies project will establish a global manufacturer of powertrain systems for commercial vehicles and light trucks. Announced as a merger of the two companies’ portfolios, it is expected to close in early 2027.

According to Dana’s announcement, the combination brings together its own global powertrain, thermal, and sealing technologies with Eaton Mobility's commercial vehicle transmissions, engine and emissions products, and electrification systems. It’s described as a “comprehensive supplier serving commercial and light vehicle markets, as well as the associated aftermarket channels”.

"This transaction marks an important milestone in our transformation and positions Dana as a leading, scaled provider of powertrain solutions," according to Dana Inc. CEO Byron Foster, who will head the combined business.

He continued: "By expanding our presence in core markets with new products and complementary technologies, we are enhancing our ability to deliver greater value to customers while strengthening margins through a more balanced portfolio and meaningful synergies. Importantly, we are bringing together highly skilled and dedicated teams whose expertise will drive our future success."

Eaton shareholders are set to own 50.1% of the combined company, and Dana shareholders will take 49.9%. st, Eaton Corp. will receive a cash distribution estimated at $1.1 billion, subject to adjustments for cash and debts.

Eaton Corp. is a longtime supplier of commercial vehicle drivetrain and powertrain products. It formed unit in 2010 to develop electrification products for commercial and passenger vehicles, and then combined that unit with its vehicle group in 2023, forming Eaton Mobility. In January Eaton announced its intent to spin-off the Eaton Mobility unit as an independent company, to concentrate on its electrical and aerospace businesses.

The companies’ announcement does not indicate the basis for projecting $250 million in “run-rate synergies” expected from their combination, but analysts anticipate that manufacturing footprint optimization will be a main source of those savings, particularly in the parallel transmission and axle system offerings.

More savings are expected through procurement and supply-chain consolidation, and engineering and development optimizations.