Allison Transmission Holdings, Inc. (NYSE: ALSN) announced on January 2 2026 that it has closed its $2.7 billion acquisition of Dana Incorporated’s Off‑Highway Drive & Motion Systems business. The deal, which values the business at 6.8× Dana’s 2024 adjusted EBITDA of roughly $400 million, expands Allison’s product portfolio into agriculture, construction and mining markets and adds about $2.7 billion in annual revenue to the combined company, bringing total revenue to an estimated $5.5 billion.
The transaction was financed with a mix of new debt and cash on hand, including a $500 million senior note offering and a $1.2 billion senior secured term loan facility. Management projects $120 million in annual synergies by year four, driven by shared engineering, purchasing and manufacturing capabilities. The acquisition also positions Allison to compete in high‑growth off‑highway segments that are less cyclical than its traditional North American commercial vehicle market, while preserving its strong defense and municipal customer base.
Strategically, the deal marks a decisive shift from a transmission specialist to a global industrial powertrain company. By adding a mature off‑highway business, Allison gains a broader market reach and a more diversified revenue mix. The new business brings a robust defense portfolio and a growing presence in infrastructure and mining, sectors that benefit from rising government spending and commodity demand. CEO David Graziosi said the acquisition “creates a global platform that will continue to deliver strong financial performance from both organic and inorganic growth.”
Financially, the combined company is expected to maintain Allison’s 37 % adjusted EBITDA margin. The acquisition adds roughly $2.7 billion in revenue, but the reported revenue impact is not a direct 1:1 match; the combined entity is projected to generate $5.5 billion in revenue, reflecting the contribution of the acquired business. The deal also delivers $120 million in annual synergies, which will help offset the cost of integration and support margin preservation. Management highlighted that the acquisition will be integrated under two business units—Allison Transmission and Allison Off‑Highway Drive & Motion Systems—under a single corporate umbrella.
In its Q2 2025 earnings, Allison beat EPS estimates by $0.24 (a 24 % beat) and revenue by $10 million, driven by strong defense sales and a 47 % YoY increase in that segment. The Q3 2025 miss—$1.63 versus $1.95 expected—was attributed to a 15.9 % YoY decline in North America On‑Highway sales and a $13 million drop in Global Off‑Highway, offset by a $25 million gain in Defense. The acquisition is expected to counterbalance these headwinds by adding a more stable off‑highway revenue stream and by leveraging Allison’s existing defense relationships.
The market reaction to the completion announcement was positive, reflecting confidence in the strategic fit and the projected synergies. Analysts noted that the acquisition aligns with industry consolidation trends and positions Allison to capture growth in defense and infrastructure spending. The deal also signals Allison’s intent to reduce its exposure to the cyclical commercial vehicle market and to build a more resilient, diversified portfolio.
Allison’s guidance for 2025 remains unchanged, with a target adjusted EBITDA margin of 37 % and a revenue outlook of $5.5 billion. The company’s focus on cost discipline, strategic investments in high‑return verticals, and the integration of the new business will be key to maintaining profitability amid macro‑economic uncertainty.
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