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INDIANAPOLIS - Allison Transmission Holdings Inc. (NYSE:ALSN), a company currently valued at $8.62 billion and maintaining a "GREAT" financial health score according to InvestingPro, announced Wednesday it has entered into a definitive agreement to acquire Dana Incorporated’s off-highway business for approximately $2.7 billion.
The transaction, which is expected to close in late fourth quarter of 2025 pending regulatory approvals, will expand Allison’s global footprint in powertrain and drivetrain solutions.
Dana’s off-highway business operates in over 25 countries with approximately 11,000 employees, providing powertrain technologies for construction, forestry, agriculture, mining and industrial applications.
"This acquisition marks a transformative milestone in our commitment to empowering our current and future customers with propulsion and drivetrain solutions," said David Graziosi, Allison Transmission Chair and CEO.
The acquisition is expected to be immediately accretive to Allison’s earnings per share and generate annual run-rate synergies of approximately $120 million. Allison plans to finance the purchase using a combination of cash and debt.
R. Bruce McDonald, Dana Chair and CEO, said, "This agreement represents a strategic opportunity to ensure the ongoing success of the business, while allowing Dana to focus on our core priorities."
BofA Securities and KPMG LLP are serving as Allison’s financial and transaction advisors respectively, with Latham & Watkins LLP as legal advisor. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are acting as Dana’s financial advisors, with Paul, Weiss, Rifkind, Wharton & Garrison LLP serving as legal counsel.
Allison will host a conference call Thursday to discuss the transaction with analysts and investors.
This report is based on a press release statement from Allison Transmission.
In other recent news, Allison Transmission reported its Q1 2025 earnings, revealing an earnings per share (EPS) of $2.23, which exceeded analyst expectations of $2.10. However, the company fell short of revenue projections, bringing in $766 million compared to the anticipated $792.25 million. Despite the revenue miss, the company demonstrated strong cash flow of $181 million and a rise in net income to $192 million. In related developments, Citi has updated its financial model for Allison Transmission, raising the price target from $95.00 to $105.00, while maintaining a Neutral stock rating. The updated model reflects a conservative forecast for certain vehicle volumes but an improved margin outlook. Additionally, Allison Transmission announced a reshuffling of its global leadership team, appointing new executives to key sales and marketing positions to strengthen market share and revenue growth. The company also saw its shareholders approve an amendment to its corporate charter, providing officers with liability protection under certain circumstances. These developments reflect Allison Transmission’s ongoing strategic adjustments and market positioning efforts.
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