Eaton Spins Off $5.1B Mobility Business, Distributes $1.1B Cash, Retains 50.1% Stake
ETN•Eaton will spin off its Mobility unit in a $5.1 billion Reverse Morris Trust with Dana, giving Eaton shareholders $1.1 billion in cash and 50.1% of the combined company. The combined entity foresees $11 billion in 2026 sales, $1.7 billion adjusted EBITDA and $250 million of run-rate synergies within two years.
1. Transaction Overview
Eaton will separate its Mobility business and merge it with Dana via a Reverse Morris Trust structured deal valued at $5.1 billion, implying 8.3x estimated 2026 pro forma adjusted EBITDA pre-synergies and over $10 billion in combined enterprise value.
2. Financial Highlights
On a fully synergized 2026 pro forma basis, the merged company projects $11 billion in sales, $1.7 billion in adjusted EBITDA (15% margin) and $250 million in annual run-rate cost synergies within 24 months. Eaton shareholders will receive a $1.1 billion cash distribution, subject to adjustments for cash and indebtedness.
3. Ownership and Governance
Under the transaction, Eaton shareholders will own at least 50.1% and Dana shareholders will hold approximately 49.9% of the combined business at close. Leadership appointments include Byron Foster as CEO, R. Bruce McDonald as Executive Chairman, and a Board composed of Dana directors alongside three Eaton designees.
4. Strategic Impact
The combination integrates Eaton Mobility’s commercial vehicle transmissions and electrification capabilities with Dana’s global powertrain, thermal and sealing technologies, creating a more diversified, higher-margin portfolio. It accelerates Dana’s 2030 targets to $14–$15 billion in sales, roughly 18% adjusted EBITDA margin and 8%–9% adjusted free cash flow margin.
