Dana Incorporated (NYSE: DAN) announced Friday that it has completed the sale of its Off-Highway business to Allison Transmission Holdings (NYSE: ALSN) in an all-cash transaction valued at $2.7 billion, marking a major step in Dana’s ongoing portfolio transformation. The divestiture values the Off-Highway unit at approximately 7.5 times its expected 2025 adjusted EBITDA and is expected to significantly strengthen Dana’s balance sheet while sharpening its strategic focus on core automotive and commercial vehicle markets.

Dana said it plans to use the transaction proceeds to reduce debt by approximately $2 billion, targeting a net leverage ratio of 1x over the business cycle. In addition, the company intends to return $1 billion to shareholders through 2027, including roughly $650 million already returned since the transaction was announced, an increase of $50 million from its prior capital return target.

The company expects the divestiture, combined with its cost-reduction initiatives, to improve margins, reduce operational complexity, and accelerate innovation across its remaining businesses.

“Closing this transaction marks an important step in Dana’s evolution,” said R. Bruce McDonald, Chairman and Chief Executive Officer of Dana. “We are now a more focused company, dedicated to serving light- and commercial-vehicle customers with both traditional and electrified systems.”McDonald added that the sale positions Dana to drive long-term growth while improving financial flexibility and operational execution.

Dana shares were trading higher following the announcement, rising 1.35% to $24.08 in pre-market trading on the New York Stock Exchange.Dana also acknowledged the employees of its former Off-Highway business, noting that their expertise helped build a world-class organization and expressing confidence in their future under Allison Transmission’s ownership.

About Dana Incorporated

Dana Incorporated (NYSE: DAN) is a global leader in drivetrain and motion systems, supplying technologies for light vehicles, commercial vehicles, and industrial applications. The company focuses on delivering both conventional and electrified propulsion solutions that support efficiency, performance, and sustainability.

About Allison Transmission Holdings

Allison Transmission Holdings (NYSE: ALSN) is a leading designer and manufacturer of fully automatic transmissions and propulsion solutions for commercial and defense vehicles. The company serves customers worldwide across on-highway, off-highway, and specialty vehicle markets.

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.