Dana Announces $1 Billion Capital Return Plan Through 2027

Dana Incorporated announced a $1 billion capital return authorization through 2027. The company provides power-conveyance and energy-management solutions for vehicles and machinery. Dana's portfolio improves efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment through products like axles, driveshafts, transmissions, and electric solutions.

Dana Incorporated (NYSE: DAN) has announced a significant capital return authorization, totaling $1 billion over the next three years. This authorization, which includes $550 million to be distributed to shareholders by the closing of the Off-Highway business sale, underscores the company's commitment to returning value to its shareholders.

The announcement comes on the heels of Dana's agreement to sell its Off-Highway business to Allison Transmission Holdings, Inc. (NYSE: ALSN) for $2.7 billion. This sale represents a 7x multiple of the expected 2025 adjusted EBITDA of the Off-Highway business [1]. The transaction is expected to close late in the fourth quarter of 2025 and will significantly strengthen Dana's balance sheet through substantial debt reduction.

By focusing on its core businesses of on-highway light- and commercial-vehicle customers, Dana aims to streamline its operations and enhance its go-to-market strategy. The sale of the Off-Highway business is a critical step in Dana's transformation, allowing the company to invest more heavily in its core competencies and continue to innovate in its fields.

Dana expects to generate $2.4 billion in net cash proceeds from the transaction, which will be used to repay approximately $2 billion of debt. This will bring Dana's target net leverage to approximately 1x over the business cycle. Additionally, the company has authorized a $1 billion capital return program through 2027, with $550 million of capital return to shareholders at or before the closing of the Off-Highway business sale [1].

The capital return authorization is part of Dana's broader strategy to enhance shareholder value and maintain its position as a leader in the design and manufacture of propulsion and energy-management solutions. The company's portfolio includes products such as axles, driveshafts, transmissions, and electric solutions, which improve the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment.

References:
[1] https://www.streetinsider.com/PRNewswire/Dana+Incorporated+Announces+Agreement+to+Sell+Off-Highway+Business+for+%242.7+Billion%3B+%241+Billion+Capital+Return+Authorization/24926223.html