Eaton Corporation plc filed a Form 425 on November 3, 2026, disclosing updated terms of its planned Reverse Morris Trust transaction to separate its Mobility business segment and combine it with Dana Incorporated.

Key Highlights

  • Reverse Morris Trust structure: Eaton will distribute its Mobility business to Eaton shareholders via an exchange offer (split-off), followed by a two-step merger with Dana Incorporated.
  • Post-close ownership: Eaton shareholders are expected to own 50.1% of the combined company's outstanding shares following completion of the transaction.
  • Cash distribution: Certain of Eaton's subsidiaries will receive a cash distribution of approximately $1.1 billion prior to completion, subject to customary cash and indebtedness adjustments, tax payments, and transaction-related adjustments.
  • Expected closing window: The transaction is expected to close in the first four months of 2027, subject to Dana stockholder approval, regulatory approvals, and customary closing conditions.
  • Supplemental agreement: On October 16, 2026, Eaton entered into a supplemental letter agreement with Dana, supplementing the definitive agreements signed on June 10, 2026.
  • SpinCo registration: Mobility (USA) Corporation (SpinCo) filed a Form S-1/S-4 (File No. 333-299528) and a Form S-4 (File No. 333-299523) with the SEC on October 19, 2026.
  • Tax treatment intent: The RMT transaction is intended to be tax-free for U.S. federal income tax purposes to Eaton and Eaton's shareholders, according to the filing.

Eaton's Mobility Separation: Structure and Key Terms of the Dana Transaction

According to the filing, Eaton Corporation plc announced its intention to separate its Mobility business segment on January 26, 2026, originally contemplating a spin-off. The plan evolved: on June 10, 2026, Eaton entered into definitive agreements with Dana Incorporated, and on October 16, 2026, it entered into a supplemental letter agreement. Together, these agreements establish a Reverse Morris Trust transaction in which Eaton will distribute the Mobility business to its shareholders through an exchange offer, allowing shareholders to tender their Eaton shares in exchange for shares of Mobility (USA) Corporation (SpinCo). The filing notes that a clean-up pro rata distribution would follow, if necessary.

The filing describes a two-step merger to follow the exchange offer. In the first step, a direct, wholly owned corporation subsidiary of SpinCo will merge with and into Dana, with Dana surviving as a direct, wholly owned subsidiary of SpinCo. Immediately thereafter, Dana will merge with and into a direct, wholly owned limited liability company subsidiary of SpinCo, with that entity surviving. The filing states that certain assets and liabilities will be sold directly to Dana in a concurrent asset sale, rather than distributed through the exchange offer.

The filing discloses that Eaton expects to use the approximately $1.1 billion cash distribution "consistent with its capital allocation framework, including repayment of outstanding indebtedness." Until the transaction closes, the Mobility business segment will continue to operate as a business segment of Eaton and its financial results will be reported in Eaton's continuing operations, the filing states. The filing also notes that if the transaction is not consummated, Eaton intends to separate its Mobility business in a spin-off. The filing contains forward-looking statements that the company identifies as subject to risks and uncertainties, as described in its cautionary language.

What Was Disclosed

Eaton filed a Form 425 disclosing the structure, ownership split, cash distribution terms, intended tax treatment, and expected closing timeline of its Reverse Morris Trust transaction to combine the Mobility business with Dana Incorporated, along with references to registration statements filed by SpinCo on October 19, 2026.