Dana Incorporated (NYSE: DAN), a leading provider of drive and motion systems for vehicles, announced on Jan 2, 2026, the completion of its previously disclosed sale of the Off-Highway business to Allison Transmission Holdings, Inc. (NYSE: ALSN) for $2.7 billion. Valued at 7.5 times the unit’s expected 2025 adjusted EBITDA, the transaction marks a pivotal milestone in Dana’s strategic evolution toward a more focused operation.
R. Bruce McDonald, Chairman and Chief Executive Officer of Dana, highlighted the significance of the deal. “Closing this transaction marks an important step in Dana’s evolution,” McDonald stated. He emphasized that the divestiture sharpens the company’s dedication to light- and commercial-vehicle customers, encompassing both traditional powertrains and electrified systems.
Combined with ongoing cost-reduction efforts, the move strengthens Dana’s balance sheet, enhances margins, reduces operational complexity, and accelerates innovation in core markets.
The $2.7 billion in proceeds will primarily fund a substantial debt reduction of approximately $2 billion. This step propels Dana toward its target net leverage ratio of 1x over the business cycle, improving financial flexibility and resilience.
In parallel, Dana commits to returning $1 billion to shareholders through 2027. Notably, the company has already distributed about $650 million since announcing the deal—an uplift of $50 million from prior guidance—demonstrating proactive capital allocation amid market uncertainties.
Dana expressed deep gratitude to the Off-Highway business’s employees, praising their expertise in building a world-class organization. The company is confident these professionals will excel under Allison’s ownership, ensuring continuity and success for the divested unit.
The transaction was expertly advised by Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC as financial advisors, Paul, Weiss, Rifkind, Wharton & Garrison LLP for legal counsel, and Ernst & Young LLP as transaction advisor. This ensemble underscores the deal’s complexity and strategic importance.
This divestiture aligns seamlessly with Dana’s recently reported strong preliminary 2025 results, including $7.5 billion in sales and $600 million in adjusted EBITDA, alongside an upbeat 2026 outlook featuring margin expansion to 10.5% and a $750 million new business backlog.
By shedding non-core assets, Dana positions itself as a leaner, higher-margin player in the evolving mobility sector, ready to capitalize on electrification trends and OEM partnerships. Investors and analysts will watch closely as the company hosts its Capital Markets Day on March 25, 2026, in New York City to elaborate on these initiatives.
