Dana Incorporated announced a definitive agreement to merge with Eaton's Mobility Group in a Reverse Morris Trust transaction that values Eaton's business unit at $5.1 billion and the combined company at over $10 billion in enterprise value. A Reverse Morris Trust is a tax-efficient structure where a parent company spins off a subsidiary and immediately merges it with an acquirer, allowing Eaton to divest its Mobility Group without triggering a large tax liability. The combined entity would generate approximately $11 billion in combined revenue and $1.7 billion in adjusted EBITDA, with management projecting $250 million in run-rate synergies over time. However, Dana's shareholders will own less than 50% of the combined company, with Eaton shareholders retaining at least 50.1%, a dilution dynamic that is weighing on DAN's stock.
Dana Incorporated (NYSE: DAN) and Eaton's Mobility Group Merger: The $10 Billion Reverse Morris Trust Deal Explained
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