Allison Transmission is acquiring the off-highway business of Dana Inc. for $2.7 billion, the drivetrain specialist announced on June 11.
The move will expand Allison’s commercial duty powertrain and industrial solutions to a broader global marketplace, the company said in its release. The deal is expected to close by Q4.
“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,” David Graziosi, Allison Transmission chair and CEO, said in a statement.
Dana Inc. in November announced its intent to sell its off-highway segment, which focuses on heavy-duty vehicles, including those serving the agriculture, materials handling, mining, construction and forestry industries. Dana, which late last year was seeking to cut costs by $200 million by 2026, said the shift away from the heavy-duty market allows it to focus on its light and commercial vehicle businesses.
R. Bruce McDonald, chairman and CEO of Dana, in a separate statement said the sale is a step in the company’s transformation that will strengthen its balance sheet and reduce the complexity of its business.
"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," McDonald said.
Dana expects the sale to generate $2.4 billion in net cash proceeds after closing. The company will use about $2 billion to repay debt as it hopes to reduce spending another $300 million through ongoing cost-savings initiatives, Dana said.
