Dana Incorporated, based in Maumee, Ohio, recently completed a significant sale of its Off-Highway business to Allison Transmission Holdings for $2.7 billion. This move, valued at 7.5 times the expected adjusted EBITDA for 2025, marks a key moment in Dana’s strategy to focus on its core operations.
CEO R. Bruce McDonald expressed that this sale allows Dana to concentrate on light and commercial vehicles, including both traditional and electrified systems. By divesting this segment, Dana aims to strengthen its balance sheet and foster innovation in its primary markets.
With the sale proceeds, Dana plans to cut its debt by about $2 billion, targeting a net leverage of 1x over the business cycle. The company also intends to return $1 billion to shareholders through 2027, including $650 million already distributed since the announcement.
It’s interesting to note that in 2023, major corporations like Dana are increasingly focusing on specialized segments to remain competitive. According to a report by McKinsey & Company, companies that divest underperforming units generally improve their financial health and market position.
Dana appreciates the hard work of its Off-Highway team and is confident they’ll thrive at Allison. This transaction reflects a broader trend in corporate America where companies are narrowing their focus to deliver better value to customers.
For more on Dana’s financial strategy, visit their official website at Dana Incorporated.
In a world where corporate decisions often impact global markets, understanding these moves helps us grasp the landscape of modern business.
