Dana Incorporated today announced that it has reached a definitive agreement to sell its Off-Highway business to Allison Transmission Holdings, Inc. for $2.7 billion. This represents 7x the expected 2025 adjusted EBITDA of the Off-Highway business. The transaction, which is subject to customary regulatory approvals and closing conditions, is projected to close late in the fourth quarter of 2025.
“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,” said R. Bruce McDonald, Chairman and Chief Executive Officer 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.”
McDonald continued, “Allison will be an excellent owner of the business and will ensure it remains a market leader for drive and motion systems for off-highway vehicles and equipment.”
Following the successful close of the transaction, Dana expects to generate $2.4 billion of net cash proceeds after tax, other transaction expenses, and assumed liabilities. Dana plans to repay approximately $2 billion of debt to achieve target net leverage of approximately 1x over the business cycle.
Additionally, the Dana board of directors has authorized a $1 billion capital return program through 2027 with $550 million of capital return to shareholders at or before closing of the transaction.
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are serving as Dana’s financial advisors. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as Dana’s legal counsel. Ernst and Young LLP is serving as transaction advisor.
SOURCE: Dana
