Dana Targets $250M in Eaton Synergies as Cost Cuts and Buybacks Gain Speed

Key Points

• Dana expects its Eaton Mobility acquisition to close in Q1 2027, creating a company with approximately $11 billion in pro forma 2026 revenue and roughly 15% EBITDA margins. The deal is projected to deliver $250 million in annual run-rate synergies by the end of the second year after closing.
• Dana generated $19 million in incremental cost savings during the second quarter and remains on track toward its $325 million cost-reduction target. The company also resumed share repurchases, planning to buy back about $200 million of stock by the end of the year as part of a broader goal to complete $2 billion in buybacks by 2029.
• Growth initiatives include commercial-vehicle recovery, Ford Super Duty volumes, aftermarket expansion, defense programs and automation. Dana is also evaluating early-stage opportunities to apply its thermal-management technology to data centers.

Dana NYSE: DAN President and CEO Byron Foster said the company’s second-quarter performance reflected continued progress on cost reductions, manufacturing efficiency and portfolio initiatives, while the planned combination with Eaton Mobility is expected to expand its commercial-vehicle and aftermarket presence.

Speaking at a JPMorgan event, Foster said Dana reported second-quarter sales of just over $2 billion, adjusted EBITDA margin of 10.3% and EBITDA of $207 million. The company generated $19 million in incremental cost savings during the quarter as it advances toward a previously announced $325 million cost-reduction target.

Foster said Dana is also addressing stranded costs associated with the planned spin-off of its Off-Highway business. He credited plant productivity projects, automation and product-line profitability efforts for supporting margin improvement over the past 18 months.

Eaton Mobility Combination

Dana expects its acquisition of Eaton Mobility to close in the first quarter of 2027. On a pro forma 2026 basis, Foster said the combined company would have approximately $11 billion in revenue and EBITDA margins of about 15%.

The transaction is expected to generate $250 million in annual run-rate synergies by the end of the second year following closing. Dana expects to capture $75 million in the first year, $200 million in the second year and the full $250 million entering the third year, according to the discussion.

Foster said the anticipated synergies include corporate overhead reductions, purchasing gains, manufacturing-footprint opportunities and plant automation. He said Dana has established integration work streams, targets and preliminary action plans that are being refined ahead of closing.

“We are highly confident in the 250 of synergies that we can deliver as part of this combination,” Foster said, adding that the company is pursuing internal goals above that level to provide a cushion if certain initiatives do not produce expected results.

The combination is intended to bring complementary products together across commercial-vehicle driveline, transmission and engine-related systems. Foster said the deal also would provide a better balance between Dana’s light-vehicle and commercial-vehicle operations, add customer diversity and increase purchasing scale.

Dana expects the combined companies to have a $1.7 billion aftermarket business. Foster said Eaton’s existing aftermarket sales presence could help Dana accelerate an expansion that otherwise would have required building additional sales teams organically.

Capital Returns and Dana 2030

Dana has resumed share repurchases and plans to buy back roughly $200 million of stock between now and the end of the calendar year, continuing through the transaction’s closing period in the first quarter of 2027. Foster said the repurchases support Dana’s objective of completing $2 billion in buybacks by the end of 2029.

The company is also examining whether it can restart repurchases after the Eaton transaction closes. Foster said the key issue is whether a post-closing buyback could create an unintended tax event for either Dana or Eaton shareholders, rather than a negotiation between the companies.

Dana’s standalone Dana 2030 plan targets $10 billion in revenue and margins in the range of 14% before the Eaton transaction. Foster said roughly $1 billion of the revenue needed to reach that target remains to be captured, primarily through aftermarket growth and Applied Technologies initiatives, while the remainder is supported by backlog, high-confidence programs and expected commercial-vehicle market improvement.

2027 Growth Drivers

Looking toward 2027, Foster said Dana expects commercial-vehicle markets to continue improving, although its exposure includes medium-duty trucks, buses and South America in addition to North American Class 8 production. He said those markets are not moving at the same pace as headline Class 8 trends.

On the light-vehicle side, Dana expects higher Ford Super Duty volumes and several new vehicle launches to contribute in 2027. Foster said the Super Duty expansion requires relatively limited incremental capital compared with a new program launch and should carry favorable contribution margins.

The company also expects opportunities in defense, powersports and aftermarket to gain momentum. Foster said demand for defense products has increased and that some defense programs can move from development to production faster than traditional original-equipment programs because they use existing technologies adapted for defense applications.

He said Dana is working on a major defense program that could receive a production order toward the end of the year, with production potentially beginning in late 2027 or early 2028. Foster estimated defense could represent a three-digit-million-dollar opportunity within Dana’s $400 million Applied Technologies target, compared with roughly 40% of that target today.

In aftermarket, Dana is expanding its Victor Reinz sealing products with national retail customers in North America. Foster said customer demand is ahead of the company’s current distribution capacity, and Dana is developing capacity and distribution-center solutions expected to come online next year.

Automation, Thermal Opportunities and Supply Chain

Foster said automation remains a major Dana 2030 work stream, with projects underway across multiple plants. Initial efforts include automating repetitive loading, unloading and material-handling tasks, as well as deploying autonomous mobile robots. The company is primarily rolling out these initiatives in North America and beginning work in Europe.

Dana also sees potential to apply its automotive thermal-management technologies to data centers and other applications. Foster said the company’s fluxless brazing technology for battery cooling plates may offer differentiated solutions, though he described the effort as early-stage. Dana estimates the potential data-center thermal market at about $2 billion and expects to better frame its opportunity by the second half of the year or the first quarters of next year.

Finally, Foster said Dana continues to evaluate its global manufacturing footprint as tariff policies and potential U.S.-Mexico-Canada Agreement rule changes evolve. He said the company has worked with customers on tariff and supply-chain management, including a recently highlighted Ford award tied to collaboration on tariff-related issues.

About Dana (NYSE:DAN)

Dana Incorporated is a global leader in the design and manufacture of drivetrain, sealing, and thermal-management technologies for the automotive, commercial vehicle, off-highway and industrial markets. The company's product portfolio includes axles, driveshafts, transmissions, e-Propulsion systems and thermal-management assemblies that help improve fuel efficiency, reduce emissions and enhance vehicle performance. Dana's expertise spans internal combustion and electrified powertrains, positioning it to support both traditional and next-generation mobility solutions.

Founded in 1904 by Clarence W.

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