International. Danfoss confirmed the signing of the agreement to acquire Eaton's hydraulic business for a cash purchase price of $3.3 billion.
"Today, we take a significant and transformative step in creating a global leader in mobile and industrial hydraulics. It's a once-in-a-lifetime opportunity to combine our largely complementary portfolios and geographic footprints. Eaton Hydraulics is a well-respected player in the global industry, recognized for its dedicated staff and strong brands. By combining the knowledge and experience of the two companies, our clients will benefit from the unparalleled expertise of a single partner. With this agreement, we continue to invest in our core hydraulics and digital solutions business to remain a strong technology partner," said Kim Fausing, President and CEO of Danfoss.
"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's president and CEO. "When completed, this agreement will bring together two talented teams with deep knowledge and experience in hydraulics. 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."
The Danfoss and Eaton Hydraulics businesses have many organizational similarities, including company culture and a focus on customers, R&D, and quality. Both companies are global with complementary geographic footprints and now, the combined company will create a broader presence around the world. In addition, the acquisition will allow Danfoss to enter the industrial hydraulics market served by Eaton Hydraulics.
Eaton Hydraulics offers products for customers in markets such as agriculture, construction and industrial market segments. The business will be transferred to Danfoss' existing commercial segment, called Danfoss Power Solutions, adding approximately 11,000 employees and sales that during 2019 reached US$2.2 billion (2.0 billion euros) in the commercial segment, which will double the hydraulic business. Today, Danfoss has approximately 28,000 employees and sales recorded through 2019 of $7 billion. Consequently, with this transaction, Danfoss will increase its size by a third.
"Hydraulics is our core, and for years we have strengthened our Power Solutions business through a high customer focus, as well as through significant investments in technology leadership. I believe our customers will benefit from combining these two companies into a line hydraulic system completely dedicated to innovation and with a broad product offering, 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, expected to close by the end of the year.
