"This is a great day for Danfoss as we welcome 10,000 new colleagues into the organization and create a global leader in mobile and industrial hydraulics," said Danfoss President and CEO Kim Fausing. "By combining the knowledge and experience of the two strong businesses and great teams, our customers will receive an unmatched level of service and expertise from a single partner.
"We will continue our significant investments to stay on the forefront of technology leadership and provide solutions that improve productivity and reduce emissions to meet the requirements of the future."
The transaction, which closed 19 months after it was announced in January 2020, was contingent upon U.S. Department of Justice and European regulatory agency approval and the subsequent divestment of Danfoss and Eaton facilities in the orbital motor and hydraulics steering unit spaces.
While Eaton's Hydraulic unit accounted for about 86 percent of the entire segment revenue, Eaton will retain about 14 percent of the unit with its filtration business and golf grips business (Golf Pride). Overall, the hydraulics business represented about 10 percent of Eaton's operations, including a substantial hydraulic and industrial hose business.
"Today's announcement is part of the ongoing transformation of Eaton into a higher growth company with better earnings consistency," said Craig Arnold, Eaton chairman and CEO. "We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry."
Eaton Corp., which maintains its North American headquarters in Beachwood, Ohio, posted 2020 revenues of $17.9 billion, with the hydraulics unit at $1.8 billion. The company sells to customers in more than 175 countries. Eaton now has approximately 96,000 employees.
Danfoss Power Solutions is on pace to have about $4.7 billion in sales revenue this year. This number takes into account the Eaton Hydraulics acquisition as well as the approximately $257 million lost with the divestment of Danfoss units.
Overall, Danfoss A/S increases by about one-third with the acquisition and brings the overall number of Danfoss employees to about 38,000, with between 17,500 and 18,000 employees now within DPS.
While no personnel changes are planned, such a massive addition means "never say never," according to Eric Alstrom, president of Danfoss Power Solutions.
"Our ambition is to find a job for everybody with this transaction," Alstrom told Rubber News Aug. 13. "This is a growth story, a tremendous opportunity. We are adding 800 sales people worldwide and 800 engineers worldwide and we are excited to access new sites on the hydraulic side—all of these things are assets.
"There will be changes but it's important to me to emphasize that this is a growth story, not a synergy one, and no merger-related layoffs are planned."
Danfoss Power Solutions adds roughly 30 former Eaton Hydraulics locations to its existing 24 locations, bringing the total to 54 manufacturing locations for DPS.
Of note are manufacturing sites gained in Japan, South Korea, Mexico, Europe, Singapore and China.