MAUMEE, Ohio—Dana Inc. has reached a definitive agreement to combine with the Driveline Division of GKN P.L.C., allowing it to re-incorporate in the United Kingdom as Dana P.L.C.
The deal consists of about $5 billion in cash and stock being transferred to GKN and its shareholders. Dana will pay $1.6 billion in cash to GKN and issue 133 million new Dana P.L.C. shares to GKN's shareholders, valued at about $3.5 billion based on Dana's share price as of March 8. The new company will assume about $1 billion of net pension liabilities.
The combined company will have sales of $13.4 billion, based on their respective 2017 results. The deal is subject to customary closing conditions and regulatory approvals. Dana projects it to close in the second half of 2018.
"I'm not sure that I've personally witnessed a more complementary transaction," James Kamsickas, Dana president and CEO, said on a March 9 call discussing the deal. "If you want to look at it from a product, market, geography or a company culture standpoint, the list goes on that's for sure."
Based in Redditch, England, GKN brings about $7 billion in 2017 sales, 61 manufacturing locations in 23 countries, five research and development centers, and 35,000 employees to the Dana portfolio. Kamsickas and Chief Financial Officer Jonathan Collins will remain in their roles as leaders of the combined company, of which Dana shareholders will own about 52.75 percent.
Keith Wandell, currently non-executive chairman of Dana, will remain in the same role as well. The board will expand to include two representatives designated by GKN.
Collins said on a March 9 conference call to investors that the move to re-incorporate to the U.K. will bring about $600 million in tax benefits. The merger also is projected to create about $1.2 billion in net synergies. And despite being based in the U.K., the new company will remain listed on the New York Stock Exchange.