Dana (DAN.N), opens new tab will sell its off-highway business to Allison Transmission (ALSN.N), opens new tab for $2.7 billion, the auto parts makers said on Wednesday. Shares of the Maumee, Ohio-based Dana rose 7% after the bell. Its board authorized a $1 billion capital return program through 2027 with shareholders set to receive $550 million at or before the transaction closes. Allison's stock fell 1.9%.
The off-highway unit makes mobile drivetrain and motion systems for heavy-duty vehicles used in construction, agriculture, material handling, mining, forestry and industrial applications.
Dana had announced plans to sell the business in November as part of a cost-cutting drive to navigate macroeconomic pressures and to simplify its business. "The sale of the Off-Highway business supports our strategy to become a streamlined light- and commercial-vehicle supplier with traditional and electrified systems," Dana CEO Bruce McDonald said in a statement. The transaction, set to close late in the fourth quarter, is expected to generate $2.4 billion of net proceeds. The off-highway unit accounted for nearly 27% of Dana's total revenue of $10.28 billion in 2024. Goldman Sachs and Morgan Stanley are financial advisers to Dana, while BofA Securities is advising Allison.
