Cummins Inc., which designs, manufactures, distributes, and services a broad portfolio of power solution, announced today that it will acquire Troy’s Meritor Inc., a leader in drivetrain, mobility, braking, aftermarket, and electric powertrain solutions for commercial vehicles and industrial markets.
Under the terms of the agreement, Cummins will pay $36.50 in cash per Meritor share, for a total transaction value of approximately $3.7 billion, including assumed debt and net of acquired cash.
“The acquisition of Meritor is an important milestone for Cummins. Meritor is an industry leader, and the addition of their complementary strengths will help us address one of the most critical technology challenges of our age: developing economically viable zero carbon solutions for commercial and industrial applications,” says Tom Linebarger, chairman and CEO of Cummins.
“Climate change is the existential crisis of our time, and this acquisition accelerates our ability to address it. Our customers need economically viable decarbonized solutions.”
The integration of Meritor’s people, technology, and capabilities will position Cummins as one of the few companies able to provide integrated powertrain solutions across combustion and electric power applications.
Cummins, based in Columbus, Ohio, believes eAxles will be a critical integration point within hybrid and electric drivetrains. By accelerating Meritor’s investment in electrification and integrating development within its new power business, Cummins expects to deliver market-leading solutions to global customers.
Meritor has a legacy dating back more than 110 years. The company has 9,600-plus employees serving commercial truck, trailer, off-highway, defense, specialty, and aftermarket customers around the world.
“This agreement with Cummins builds on Meritor’s track-record of outstanding performance and service to our customers. Our offerings will continue to play an important, strategic role as commercial vehicles transform to become electric and autonomous,” says Chris Villavarayan, president and CEO of Meritor.
Meritor’s board has unanimously approved the agreement with Cummins and recommends that Meritor shareholders vote in favor of the transaction at the Special Meeting of Shareholders to be called in connection with the transaction.
The transaction, which is subject to customary closing conditions and receipt of applicable regulatory approvals and Meritor shareholder approval, is expected to close by the end of the calendar year.