Business Context and Reporting Period
This Form 8-K, filed on June 10, 2026, by Dana Incorporated ("Dana"), announces the entry into definitive agreements for a Reverse Morris Trust transaction with Eaton Corporation plc ("Eaton"). The transaction involves Eaton spinning off its Vehicle and eMobility business segments into a new entity ("SpinCo"), which will then merge with Dana. Upon completion, Dana will become a wholly-owned subsidiary of SpinCo, which will be renamed "Dana Incorporated."
Key Financial Metrics and Transaction Structure
- Ownership Structure: Post-merger, former Eaton shareholders will own approximately 50.1% of the combined company, while former Dana shareholders will own approximately 49.9% on a fully diluted basis.
- Financing: Dana and SpinCo have secured a $2.6 billion 364-day bridge loan facility from Goldman Sachs Bank USA to fund the transaction and refinance existing Dana indebtedness. This is expected to be replaced by permanent financing.
- Cash Consideration: SpinCo will make a cash payment to Eaton Ohio of approximately $1.1 billion (subject to adjustments) prior to the distribution of SpinCo stock.
- Termination Fee: Dana is required to pay Eaton a termination fee of $158.7 million if the Merger Agreement is terminated under certain specified circumstances.
- Acquisition of Assets: A subsidiary of Dana will acquire all outstanding equity interests of Royal Precision Holding Corp. from Eaton Ohio immediately prior to the distribution.
Material Changes and Agreements
The filing details the execution of two primary agreements: the Separation and Distribution Agreement and the Agreement and Plan of Merger. Key material changes include:
- Corporate Restructuring: Eaton will transfer its Vehicle and eMobility assets and liabilities to SpinCo.
- Shareholder Distribution: Eaton will distribute 100% of SpinCo common stock to its shareholders via either a pro-rata spin-off or an exchange offer followed by a clean-up spin-off.
- Merger Mechanics: Following the distribution, a merger subsidiary will merge with Dana, converting each outstanding Dana share into one share of SpinCo common stock.
- Governance: The post-closing Board of Directors will consist of all current Dana directors plus three designated Eaton representatives (one executive officer and two directors).
Guidance, Outlook, Risks, and Conditions
The transaction is intended to be tax-free for U.S. federal income tax purposes. Consummation is subject to several conditions, including:
- Approval by a majority of Dana's outstanding common stockholders.
- Receipt of U.S. and international regulatory clearances.
- Effectiveness of SEC registration statements.
- NYSE approval for the listing of SpinCo common stock.
- Completion of the $1.1 billion SpinCo Payment.
Risks and Uncertainties: The filing includes extensive forward-looking statements regarding the ability to complete the transaction, realize synergies, and obtain financing. Risks include failure to obtain regulatory approvals, integration difficulties, disruption of management time, and potential litigation. The transaction must be consummated by June 10, 2027, subject to a three-month extension for regulatory approvals.
Investor Verification Checklist
- Verify the final ownership split (50.1% Eaton / 49.9% Dana) in the upcoming proxy statement/prospectus (Form S-4).
- Confirm the terms of the permanent financing intended to replace the $2.6 billion bridge loan.
- Monitor the status of regulatory approvals and the shareholder vote required for the Merger.
- Review the Tax Matters Agreement to understand the allocation of tax liabilities and attributes.
- Assess the impact of the $158.7 million termination fee obligation on Dana's liquidity if the deal fails.