Danfoss Acquiring Eaton’s Hydraulic Business
By Jack Burke22 January 2020
Danfoss announced that it has entered into an agreement to acquire Eaton’s Hydraulics business for a cash purchase price of US$3.3 billion.
“Today, we take a significant and transformational step in creating a global leader in mobile and industrial hydraulics. It is a once-in-a-lifetime opportunity to combine our largely complementary portfolios and geographic footprints. Eaton Hydraulics is a highly respected player in the global industry, recognized for its dedicated people and strong brands. By combining the knowledge and experience of the two businesses, our customers will benefit from unmatched expertise from a single partner. With this agreement, we continue to invest in our core hydraulics business and digital solutions to stay a strong technology partner,” says Kim Fausing, Danfoss president and CEO.
Danfoss serves a wide range of industries, including the oil & gas and marine sectors. Eaton’s hydraulic business manufacturers products for several industries, including oil & gas.
“We believe Eaton’s Hydraulics business will benefit greatly from being part of a company that has hydraulics at its core,” says Craig Arnold, Eaton chairman and CEO. “When complete, this deal will bring together two talented teams with deep hydraulics knowledge and expertise. And Eaton’s hydraulics team will be part of a company that is committed to becoming a global leader in mobile and industrial hydraulics. The combined business will also benefit customers and distributors by offering industry-leading technology and a much broader portfolio of hydraulic solutions.”
Danfoss said the two businesses are leaders in the industry and have many organizational similarities, including company culture and a focus on customers, R&D and quality. Both businesses are global with complementary geographic footprints and the combined business creates a broader presence across the world. Furthermore, the acquisition will enable Danfoss to enter the industrial hydraulics market that is served by Eaton Hydraulics.
Eaton Hydraulics will be transferred into the existing Danfoss business segment, Danfoss Power Solutions, adding approximately 11 000 employees and 2019 sales of US$2.2 billion to the business segment, which will double the hydraulics business. Danfoss today has approximately 28 000 employees and 2019 sales of US$7.0 billion. Accordingly, with this transaction, Danfoss will increase its size by one-third.
“Hydraulics is our core, and we have for years strengthened our Power Solutions business through high customer focus, as well as through significant investments in technology leadership. I believe our customers will benefit from combining these two businesses into a full-line hydraulics player dedicated to innovation and with a broad offering of products, robust distribution channels and tremendous geographic reach,” says Eric Alström, president of Danfoss Power Solutions.
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year.