Maumee, Ohio-based Dana (NYSE:DAN) said Friday it completed the previously announced sale of its Off-Highway business to Allison Transmission (NYSE:ALSN) Holdings for $2.7 billion, effective Jan. 2.
The transaction was valued at 7.5 times the unit's projected 2025 adjusted EBITDA.
Dana said it will use the proceeds to reduce debt by roughly $2 billion, aiming for a net leverage ratio of 1x over the business cycle, while enabling $1 billion in capital returns to shareholders through 2027—of which about $650 million has already been returned, a $50 million increase from the prior target.
The divestiture allows Dana to sharpen its focus on light-vehicle and commercial-vehicle systems, alongside ongoing cost-reduction efforts.
The Off-Highway unit, which supplies drivetrains and components for construction, mining and agricultural equipment, bolsters Allison's portfolio in fully automatic transmissions for severe-duty applications.