Strategic Acquisition of Dana Incorporated’s Off-Highway Business by Allison Transmission: Background, Financials, and Impact

Strategic Acquisition of Dana Incorporated’s Off-Highway Business by Allison Transmission: Background, Financials, and Impact


Background Story

  • The Competition Commission of India (CCI) approved Allison Transmission Holdings Inc.’s acquisition of Dana Incorporated’s off-highway business (Dana OH) on September 10, 2025. (TaxTMI)

  • On June 11, 2025, Allison entered into a definitive agreement to acquire Dana OH for approximately $2.7 billion. (allisontransmission.com, DANA, Reuters)

  • Dana OH supplies drivetrain, transmission, and propulsion solutions for off-highway industries (construction, agriculture, mining, forestry, etc.) and operates in over 25 countries with around 11,000 employees. (allisontransmission.com, DANA, Reuters)

Introduction of this Acquisition

Aim to Achieve

Financial Obligations of This Acquisition

Allison Transmission:

  • Will fund the purchase via a combination of cash on hand and debt—with committed financing from Barclays, BofA Securities, and Citigroup. (allisontransmission.com, PR Newswire, Fitch Ratings)

  • Fitch has affirmed Allison’s issuer default rating at 'BB+' with a stable outlook, noting significant revenue growth but also margin pressure. (Fitch Ratings)

Dana Incorporated:

  • Expects $2.4 billion in net cash proceeds after tax, transaction expenses, and assumed liabilities. (DANA, Reuters, Trucks, Parts, Service)

  • Plans to repay ~$2 billion in debt, aiming for net leverage of approximately 1x over the business cycle. (DANA, Reuters)

  • Approved a $1 billion capital return program through 2027, including $550 million to be returned to shareholders by or before closing. (DANA, Reuters)

Benefits to Stakeholders

Shareholders:

Employees and Customers:

  • Allison gains Dana’s off-highway expertise, manufacturing footprint, and global client base. (allisontransmission.com, DANA)

  • Dana can focus on light- and commercial-vehicle systems, with reduced complexity and strategic clarity. (DANA, Reuters)



Output of this Acquisition

Outcome of this Acquisition

  • Solidifies Allison’s competitive position across broader vehicle applications. (allisontransmission.com, DANA)

  • Dana emerges as a more focused provider in its core market, financially stronger and streamlined. (DANA, Reuters)

Final Impact of this Acquisition

  • Enhances Allison’s global scale and technological depth. (allisontransmission.com, DANA)

  • Fortifies Dana’s balance sheet and returns value to shareholders. (DANA, Reuters)

  • Likely fosters innovation and efficiency in off-highway drivetrain and propulsion sectors.

Other Objective of the Deal

  • Achieves strategic alignment: Allison gains off-highway strength, while Dana streamlines and focuses on core competencies. (DANA, Reuters, allisontransmission.com)

  • Supports industry consolidation and deeper R&D collaboration.

  • Promotes financial discipline with Dana's debt deleveraging and shareholder returns.

  • Global presence and product synergy bolster competitive edge in diversified markets.

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