Dana Inc., the 120-year-old drivetrain supplier that counts Ford Motor Co. as its largest customer, is exploring a sale of its off-highway business, people familiar with the matter told Bloomberg, as the company responds to sluggish demand in its key markets.
The Ohio-based company is working with advisers on the potential divestment, according to the people, who asked not to be identified because talks are private. The business could fetch a few billion dollars in a sale, they said. The process is at a very early stage, one of the people said.
Dana’s off-highway business provides drive and motion systems for heavy-duty vehicles in the agriculture, materials handling, mining, construction and forestry sectors. The unit generated revenue of about $3.2 billion — about 30 percent of Dana’s business — and earnings before interest, taxes, depreciation and amortization of $465 million in 2023, data compiled by Bloomberg show.
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Any sale would leave Dana focused on passenger cars and trucks, making it potentially attractive for other automotive suppliers. Ford accounted for about 20 percent of Dana’s business in 2023, according to the supplier’s most recent annual report. Stellantis was next with about 9 percent of the business.
Deliberations are ongoing and there’s no certainty they’ll result in a divestment by Dana, the people said.
A representative for Dana declined to comment.
Dana’s shares have declined 24 percent this year because of difficult automotive and industrial markets and sluggish demand for electric vehicles, leaving it with a market value of $1.6 billion. The company also has about $2.9 billion in debt.
Dana was targeted by activist investor Carl Icahn in 2022 and he remains one of the largest shareholders. Founded in 1904, the company said in July that it’s trying to contain costs and boost efficiency amid “softer” end-market demand. It is scheduled to announce third-quarter earnings on Oct. 30.
Based in suburban Toledo, Dana ranks No. 28 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $10.5 billion in 2023.
Automotive News contributed to this report.
Source: autonews.com
