ETN's 7% Decline In 2 Days Pushed It Closer To 200-DMA — Its Latest Deal That Creates A Combined Firm Worth $10B Has Drawn Investor Buzz

Eaton announced that it has signed a definitive agreement with Dana under which Eaton will separate and combine its Mobility Group with Dana in a Reverse Morris Trust transaction.

• The deal values Mobility Group at approximately $5.1 billion, which represents a multiple of 8.3x 2026 estimated pro forma adjusted EBITDA, or 5.9x on a fully synergized basis.
• The combined company will operate as Dana Incorporated and will continue to be listed on the NYSE under the ticker symbol DAN.
• The company expects the transaction to close in the first quarter of 2027.

Shares of Eaton Corporation (ETN) had declined nearly 7% in the last two sessions, taking them closer to the 200-day moving average, but the company’s latest deal announcement, which is part of its 2030 Growth Strategy, applied the brakes to the decline.

Eaton announced that it has signed a definitive agreement with Dana (DAN) under which Eaton will separate and combine its Mobility Group with Dana in a Reverse Morris Trust (RMT) transaction, creating a combined company valued at over $10 billion.

Mobility Group Valuation

The deal values Mobility Group at approximately $5.1 billion, representing a multiple of 8.3x 2026 estimated pro forma adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), or 5.9x on a fully synergized basis.

The firm highlighted that the combined company will operate as Dana Incorporated and will continue to be listed on the NYSE under the ticker symbol DAN.

Eaton stated that the combined entity will generate approximately $11 billion in pro forma revenue and $1.7 billion in pro forma estimated 2026 adjusted EBITDA. Other benefits include increased scale, $250 million in run-rate cost synergies, and greater diversification across customers, geographies, and end markets.

The company expects the transaction to close in the first quarter of 2027.

Management’s Take On The Deal

Paulo Ruiz, Eaton Chief Executive Officer at Eaton, stated that the transaction will provide substantial cash value for Eaton to deploy to its highest-growth and highest-margin opportunities. “Looking ahead, our portfolio will be closely aligned with the powerful megatrends driving generational growth in our Electrical and Aerospace businesses, and we look forward to continuing our momentum to drive meaningful value for our customers and shareholders.”

Meanwhile, Dana CFO Timothy Kraus noted that the firm’s prior targets included approximately $10 billion in sales, 14% to 15% adjusted EBITDA margins, and a 6% adjusted free cash flow margin. With the addition of Eaton Mobility, the firm is now targeting $14 billion to $15 billion in sales, approximately 18% adjusted EBITDA margins, and an 8% to 9% adjusted free cash flow margin by 2030.

“Importantly, after funding the approximately $1.1 billion cash distribution to Eaton, we expect to maintain a strong balance sheet with approximately 1.2x net leverage on a pro forma 2026 estimated basis, supporting continued investment and disciplined capital allocation.”

Eaton’s Earlier Acquisitions

Earlier this year, Eaton completed the acquisition of Ultra PCS from the Cobham Ultra Group for $1.55 billion. The company produces electronic controls, sensing, stores, ejection, and data processing solutions, and estimates 2025 sales of approximately $240 million.

Last year, Eaton signed an agreement to acquire Boyd Corporation's Boyd Thermal business from Goldman Sachs Asset Management for $9.5 billion. According to the firm, Boyd Thermal had estimated 2026 sales of $1.7 billion.

What Retail Traders Think About ETN

On Stocktwits, retail sentiment improved from ‘extremely bearish’ to ‘bearish’ with high message volume.

ETN shares have gained over 14% this year, while DAN stock has surged over 42% in the period.

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