Danfoss just announced that it has entered into an agreement to acquire Eaton’s Hydraulics business for a cash purchase price of $3.3 billion (about €3 billion). The acquisition is fully in line with Danfoss’ strategy to strengthen its core businesses and enhance customer value, according to a Danfoss spokesperson.
The Danfoss and Eaton Hydraulics businesses are both major players in the hydraulics industry and share several similarities, including company cultures and a focus on customers, R&D, and quality. Both are global businesses, and combining them creates a larger presence across the world. Furthermore, the acquisition will let Danfoss enter the industrial hydraulics markets served by Eaton Hydraulics.
Eaton Hydraulics sells to customers in markets such as agriculture and construction. The business will be move into Danfoss’ business segment, Danfoss Power Solutions, adding approximately 11,000 employees and 2019 sales of $2.2 billion (2. billion Euros) to the business segment, which will double the hydraulics business. Danfoss today has about 28,000 employees and 2019 sales of $7 billion (€6.3 billion). So this transaction will let Danfoss increase its size by one-third.
“Today, we take a significant and transformational step in creating a global leader in mobile and industrial hydraulics,” says Kim Fausing, Danfoss president and CEO. “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,” Fausing continues. “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.”
“We believe Eaton’s Hydraulics business will benefit greatly from being part of a company that has hydraulics at its core,” adds 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 committed to becoming a global leader in mobile and industrial hydraulics.”
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year.
