Allison Transmission has acquired Dana's off-highway business in a $2.7 billion deal announced Wednesday.
"As we committed to last year, the sale of the off-highway business supports our strategy to become a streamlined. light- and commercial-vehicle supplier with traditional and electrified systems," says R. Bruce McDonald, chairman and CEO of Dana. "This transaction is a critical step in our transformation, meaningfully strengthening our balance sheet, reducing complexity in our business, and allowing us to return significant capital to our shareholders. Combined with our ongoing $300 million cost-savings initiatives, this transaction enables a focused path to grow and innovate, invest in our business, and continue to improve our cost structure."
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Dana expects to generate $2.4 billion of net cash proceeds after tax, transaction expenses and assumed liabilities. It plans to repay about $2 billion of debt.
Allison says the acquisition aligns with the company's priorities to expand in emerging markets, enhance core technologies and deliver strong financial results. It says it will also be able to offer a wider range of commercial-duty powertrain and industrial solutions to more customers and end users worldwide.
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"This acquisition marks a transformative milestone in our commitment to empowering our current and future customers with propulsion and drivetrain solutions that improve the way the world works," says David Graziosi, Allison's chair and CEO. "We look forward to harnessing this momentum to increase value for all of our stakeholders worldwide."
Dana's off-highway business operates in more than 25 countries and has 11,000 employees. It provides solutions in the construction, forestry, agriculture, specialty, aftermarket, industrial and mining segments.
