TOLEDO – Dana, Inc., a longtime stalwart in Toledo’s automotive community, in January completed the sale of its off-highway business for $2.7 billion to an Indianapolis-based leader in the manufacture of automatic transmissions.
“We are now a more-focused company dedicated to serving light- and commercial-vehicle customers with both traditional and electrified systems,” said R. Bruce McDonald, chairman and chief executive officer of the Maumee-based Dana.
He added, “Closing this transaction marks an important step in Dana’s evolution.” McDonald said it will “strengthen our balance sheet, improve margins, reduce complexity, and position us to accelerate innovation and growth in our core markets.”
Dana, which set up shop in Toledo in 1929, makes axles, driveshafts, transmissions and more for a wide range of vehicles.
Allison Transmission Holdings, Inc., purchased the off-highway group, which makes drive and motion systems for heavy-duty vehicles used in agriculture, construction, mining, and other industries.
“We are excited to welcome our new colleagues from Dana to Allison,” said David Graziosi, Allison chair, president, and CEO. “Together, we have an expanded market reach and broader portfolio of high-quality and reliable products.”
Allison is a leading designer and manufacturer of vehicle propulsion solutions for commercial and defense vehicles, the largest global manufacturer of medium- and heavy-duty fully automatic transmissions, and a leader in electrified propulsion systems.
McDonald said the proceeds will enable Dana to reduce debt by about $2 billion, and to return $1 billion to shareholders through 2027.
Responding to the sale, the credit-rating agency S&P Global, formerly Standard & Poor’s, raised Dana’s credit rating to BB.
“Our upgrade reflects Dana’s material debt reduction achieved through the sale of its off-highway business and significant progress in cost-cutting initiatives,” the agency said. “We believe Dana is well-positioned to outperform the market due to its scale and leadership in key product categories.”
