Dana Incorporated ($DAN) is not merging with Eaton ($ETN): it agreed on June 10, 2026 to combine with Eaton's Mobility business in a Reverse Morris Trust that values that unit at about $5.1 billion, with closing targeted for the first quarter of 2027. Since the announcement, the U.S. antitrust waiting period has expired and the spun-off Eaton unit has filed its public S-4 registration statements. Dana stock, meanwhile, closed at $26.83 at the October 23, 2026 close, 24.36% below its pre-deal level.
The terms
Dana's June 11 press release and the matching 8-K set out the structure. Eaton moves its Vehicle and eMobility segments into a new subsidiary, Mobility (USA) Corporation, called SpinCo in the filings. Eaton then distributes SpinCo to its own shareholders, either through an exchange offer or a pro rata spin-off at Eaton's choice. Right after that, a SpinCo subsidiary merges into Dana. Each Dana share converts into one SpinCo share, and SpinCo is renamed Dana Incorporated and lists on the NYSE.
- Value: about $5.1 billion for Eaton Mobility on a cash-free, debt-free basis. That is about 8.3x estimated 2026 pro forma adjusted EBITDA before synergies, or about 5.9x including run-rate synergies.
- Ownership: Eaton shareholders own at least 50.1% of the combined company, and Dana shareholders about 49.9%.
- Cash to Eaton: a distribution of about $1.1 billion, subject to adjustments, funded by new debt raised before closing.
- Scale: about $11 billion in sales and $1.7 billion of adjusted EBITDA (about a 15% margin) on a fully synergized 2026 basis, plus $250 million of run-rate synergies expected within 24 months of closing.
- Leadership: R. Bruce McDonald became executive chairman and Byron Foster CEO on July 1, 2026, and Timothy Kraus stays CFO. The board will be all of Dana's directors plus three Eaton designees.
- Protections: Dana owes Eaton a $158.7 million termination fee in certain circumstances. The outside date is June 10, 2027, with a three-month extension available for pending regulatory approvals or the distribution.
Dana also raised its 2030 targets to $14 billion to $15 billion in sales, an adjusted EBITDA margin of about 18% and an 8% to 9% adjusted free cash flow margin. Kraus said the company expects net leverage of about 1.2x on a pro forma 2026 basis after funding the cash payment to Eaton.
What has happened since
- Antitrust: According to SpinCo's S-4 filing, Dana and Eaton filed under the Hart-Scott-Rodino Act on June 25, 2026, and the waiting period expired at 11:59 p.m. ET on July 27, 2026. Filings with competition authorities in other jurisdictions, including Canada and Mexico, were submitted on or before July 17, 2026.
- Buybacks back on: On July 27, Eaton consented in a side letter to Dana repurchasing shares through closing. At a J.P. Morgan auto conference on August 13, Foster said Dana would buy back roughly $200 million of stock by the end of the calendar year. He also said the deal "will be structured as a split off" and was expected to close in Q1 of 2027.
- Registration: Mobility (USA) Corp. submitted draft registration statements confidentially on August 7 and filed two S-4s publicly on October 19, 2026. The S-4 confirms that Eaton has elected the exchange offer, in which Eaton holders may swap their shares for SpinCo stock. On October 16, the parties also signed a second letter agreement adding a second-step merger.
- Remaining conditions: the other required regulatory approvals, effectiveness of SpinCo's registration statements, NYSE listing of the SpinCo shares, which will trade as DAN, and approval by Dana stockholders. The preliminary proxy statement/prospectus in the S-4 schedules a special meeting for December 7, 2026, with an October 15, 2026 record date. Adoption needs a majority of Dana's outstanding shares.
The math
The two announced multiples imply Eaton Mobility's earnings base. $5.1 billion / 8.3 = about $614 million of 2026 adjusted EBITDA before synergies, and $5.1 billion / 5.9 = about $864 million with synergies. The gap of about $250 million matches the synergy target. The $1.1 billion cash payment equals about 21.6% of the $5.1 billion value, and the $158.7 million break fee about 3.1%.
| Close | $DAN | $ETN | S&P 500 |
|---|---|---|---|
| June 10, 2026 (pre-announcement) | $35.47 | $375.46 | 7,266.99 |
| June 11, 2026 (deal day) | $30.11 (-15.11%) | $393.64 (+4.84%) | 7,394.30 (+1.75%) |
| July 2, 2026 (DAN low close) | $24.91 (-29.77% vs June 10) | ||
| October 23, 2026 | $26.83 (-24.36% vs June 10) | $366.11 (-2.49% vs June 10) | 7,623.68 (+4.91% vs June 10) |
The market's first read was plain: Dana lost 15.11% on deal day ($30.11 / $35.47 - 1), and Eaton gained 4.84% while the S&P 500 rose 1.75%. Since June 10, Dana has trailed the index by 29.27 percentage points (-24.36% versus +4.91%). Dana holders are swapping a standalone company for 49.9% of a bigger one, and Eaton gets $1.1 billion in cash plus majority ownership for its holders. Prices are from Yahoo Finance for DAN and ETN.
What to watch
- SEC effectiveness of the S-4s and the exchange-offer terms, including the ratio and any discount Eaton offers its holders.
- The December 7, 2026 Dana special meeting, as scheduled in the preliminary filing, and the vote result.
- The remaining non-U.S. regulatory approvals ahead of the Q1 2027 target and the June 10, 2027 outside date.
- Progress on the roughly $200 million buyback before year end.
For related coverage, see our reports on the shift in U.S. auto preferences, electrification M&A and sum-of-the-parts breakups, or browse the latest on the Trading Tips For You homepage.
Bull/Bear Verdict
Bull Case: Dana gains about $11 billion of pro forma sales, $250 million of targeted synergies and a 2030 margin target near 18%, while the stock trades 24.36% below its pre-deal price. With the U.S. antitrust waiting period already expired, the path to a Q1 2027 close is narrower.
Bear Case: Dana holders end up with only about 49.9% of the combined company, and the deal adds the debt that funds a $1.1 billion cash payment to Eaton. The stock has trailed the S&P 500 by 29.27 points since June 10, and the December 7 stockholder vote plus non-U.S. approvals remain.
FAQ
Is Dana merging with Eaton?
No. Dana is combining with Eaton's Mobility business, its Vehicle and eMobility segments, after Eaton separates that business into Mobility (USA) Corporation. Eaton itself remains a separate company.
What does the $5.1 billion figure mean?
It is the value placed on Eaton Mobility on a cash-free, debt-free basis: about 8.3x estimated 2026 pro forma adjusted EBITDA before synergies.
What happens to DAN shares?
Each Dana share converts into one share of SpinCo, which will be renamed Dana Incorporated and listed on the NYSE. Former Dana holders will own about 49.9%.
When will the deal close?
Dana and Eaton expect closing in the first quarter of 2027, after a Dana stockholder vote scheduled in the preliminary S-4 for December 7, 2026. The merger agreement's outside date is June 10, 2027, with a possible three-month extension.
Updated October 26, 2026: rewritten with terms from Dana's press release and 8-K, antitrust and registration updates from the October 19 S-4, and DAN and ETN price data through the October 23, 2026 close. Correction: the original headline called this a $5.1 billion merger of Dana and Eaton. Dana is combining only with Eaton's Mobility business, and $5.1 billion is that unit's value.