Allison Transmission Holdings, Inc. announced that it has received all required regulatory approvals to acquire Dana Incorporated’s Off‑Highway business for $2.7 billion. The transaction is expected to close at the end of 2025 and will add a new product line that serves agriculture, construction, and mining markets to Allison’s core on‑highway and defense segments.
The deal brings together Allison’s transmission expertise with Dana’s Off‑Highway Drive and Motion Systems team, creating a vertically integrated propulsion platform. Analysts estimate the acquisition will generate roughly $120 million in annual run‑rate synergies and will nearly double Allison’s net sales to about $6 billion. Financing will be a mix of cash and debt, raising the company’s debt‑to‑EBITDA ratio to an estimated 2.5× post‑closing, a level considered sustainable by industry benchmarks.
Allison’s recent quarterly results provide context for the strategic timing of the deal. In Q3 2025, the company reported revenue of $693 million, a 15.9% decline YoY and a miss of $764 million consensus estimates. Adjusted EPS fell to $1.75 from $1.94 expected, and the company lowered its full‑year 2025 revenue guidance to $3.0 billion and EBITDA guidance to $1.11 billion. Management cited “extraordinary and volatile global macroeconomic factors” – including subdued commercial vehicle demand, tariff uncertainty, and upcoming emissions regulations – as the primary drivers of the revenue shortfall and guidance cut.
CEO David Graziosi said the acquisition “marks a transformative milestone in our commitment to empowering our current and future customers with propulsion and drivetrain solutions that improve the way the world works.” He added that integrating Dana’s Off‑Highway team will accelerate Allison’s electrification strategy, as Dana’s unit specializes in hybrid and electric propulsion systems that are increasingly demanded under tightening emissions rules.
The transaction positions Allison to counter the headwinds that have weighed on its recent earnings. By expanding into high‑growth off‑highway markets and adding complementary technology, the company can diversify revenue streams and offset the decline in on‑highway demand. The expected synergies and the addition of electric‑propulsion expertise also support Allison’s long‑term growth strategy, potentially improving margins and providing a competitive edge as the industry moves toward electrification.
Overall, the regulatory approval marks a significant step in Allison’s transformation plan. While the company faces short‑term revenue pressure, the acquisition is expected to strengthen its product portfolio, broaden its geographic footprint, and enhance its ability to meet evolving customer demands in a rapidly electrifying market.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.