Dana Buying Oerlikon Drive Systems

Dana Inc. announced that it has signed a definitive agreement to purchase the Drive Systems segment of the Oerlikon Group, a global manufacturer of high-precision gears, planetary hub drives for wheeled and tracked vehicles and products, controls and software that support vehicle electrification across the mobility industry.

Oerlikon Drive Systems is composed of two global brands, Oerlikon Graziano and Oerlikon Fairfield, which offer engineering and manufacturing expertise in the development of gear-driven solutions for mobile vehicles and industrial equipment.  Its products can be found in a wide range of applications for operating machinery and equipment used in agriculture, construction, energy, mining, transportation and high-performance sports cars.

Under the terms of the agreement, Dana will acquire Oerlikon’s Drive Systems business for approximately $600 million. Committed financing has been arranged to complete the transaction and Dana said that subject to customary regulatory approvals, the acquisition is expected to close late this year or the first quarter of 2019.

“Oerlikon Drive Systems is a well-respected technology company that has provided exceptional product innovation and customer satisfaction for nearly a century,” said Jim Kamsickas, president and chief executive officer of Dana.  “A great fit culturally, this investment will deliver significant long-term value by accelerating our commitment to vehicle electrification and strengthening the technology portfolio for each of our end markets while further expanding and balancing the manufacturing presence of our off-highway business in key geographical markets.”

The acquisition of Oerlikon Drive Systems provides numerous opportunities to drive profitable growth, Dana said. It complements and extends Dana’s current technology portfolio, especially with respect to high-precision helical gears for the light and commercial vehicle markets and planetary hub drives for wheeled and tracked vehicles in the off-highway market. It also provides products, controls and software that support vehicle electrification in each of Dana’s end markets – light vehicle, commercial vehicle, and off-highway.

Dana said it also optimizes its global manufacturing presence in key growth markets such as China, India and the United States and adds five research and development facilities to Dana’s extensive network of technology centers.

Founded in 1919, Oerlikon Drive Systems generated revenue of approximately $730 million in 2017. The business employs approximately 5900 people and operates 10 manufacturing and engineering facilities in China, India, Italy, the United Kingdom, and the United States, with two additional facilities under construction in China. 

The business serves a global roster of original-equipment manufacturers.  Selected customers include AGCO, Ashok Leyland, Aston Martin, BMW, Caterpillar, CNH, Daimler, John Deere, Ferrari, Fiat Chrysler Automobiles, MAN, McLaren, Oshkosh, SANY, Scania, Terex, Volkswagen, and AB Volvo.

“Oerlikon’s technology will enable Dana to expand our product offerings for customers in the off-highway segment while complementing our rapidly growing portfolio of electrified product offerings for all end markets,” said Kamsickas. “Further, Oerlikon’s manufacturing and R&D footprint enhances our ability to serve many of our current customers while connecting us with new customers, especially in India and China.”

This is Dana’s third significant move in the last two years. In 2016, it purchased the power transmission and fluid power businesses of Brevini Group, S.p.A. In March of this year, it signed definitive agreements to combine with the Driveline division of GKN plc to create Dana plc, a global supplier on off-highway, commercial vehicle and automotive driveline systems.

Then in June, Dana Inc. and Hydro-Québec announced a joint venture partnership in which TM4 Inc., a subsidiary of Hydro-Québec, will become Dana’s source for electric motors, power inverters and control systems. As part of this agreement, Dana was to become the majority shareholder of TM4.