Danfoss has officially finalized its $3.3 billion (approximately €3 billion) acquisition of Eaton’s hydraulics business following confirmation of all necessary regulatory approvals and closing conditions. The move will see the Danfoss Group grow in size by a third and establish itself as a global leader in mobile and industrial hydraulics.
Mobile hydraulics has been one of Danfoss’ core and most successful businesses for over 50 years. The acquisition of Eaton’s hydraulics business is a vital aspect of Danfoss’ growth strategy. Eaton’s hydraulics business will be combined with the Danfoss Power Solutions business segment, adding approximately 10,000 employees worldwide and US$1.8 billion (around €1.5 billion) in 2020 global sales. Combining the two organizations will double the size of Danfoss Power Solutions, increasing its innovation capacity twofold.
To move the deal through for the U.S. Department of Justice (DOJ) approval, Eaton and Danfoss must sell certain orbital motor and steering unit assets to Interpump Group S.p.A., or to another entity approved by the DOJ. This sale did not have to be completed, however, prior to the closing of the company’s transaction with Danfoss.
Eaton and Danfoss have already agreed to the proposed settlement.
Second, the European Commission approved Interpump as a suitable purchaser of the orbital motor and steering assets. These assets were required to be divested by the European Commission under the conditional approval granted in March 2021.
The strengthened Danfoss Power Solutions will have the broadest selection of mobile and industrial hydraulics products and solutions available on the market, with the full line offering including fluid conveyance systems. The company’s distribution channels have also been significantly boosted, while its local application support and geographical reach have increased considerably. All of these benefits will enable Danfoss Power Solutions to become an even stronger technology partner for existing and new customers, plus take the lead in digitalization and electrification.
According to Danfoss President and CEO Kim Fausing, “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. 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.”
Eric Alström, President of Danfoss Power Solutions, added, “The need for technologically innovative and industry-changing hydraulic solutions is as great as ever. We’re very pleased to complete this significant investment in our core hydraulics business so we can serve our customers and partners even better than before. Combining the two robust businesses represents a perfect match and provides countless opportunities, such as increasing our engineering expertise and capabilities, doubling our global application support and extending the value of our Application Development Centers and digital design tools. Adding fluid conveyance and industrial applications are other assets gained through this transaction.”
Paulo Ruiz, the President of the former Eaton hydraulics business, added, “This is an exciting new chapter for both of our businesses and our people, which are stronger together. The new Danfoss Power Solutions team will create a global leader in mobile and industrial hydraulics, drawing on long legacies of innovation and industry-leading expertise. The combined product portfolio and broadened global reach will better serve customers and distributors all around the world.”