Allison execs bullish on international growth through acquisition
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Executives at Indianapolis-based Allison Transmission Inc. say the company’s planned $2.7 billion acquisition of the off-highway business unit of Ohio-based Dana Inc. will bring a boost to the company’s global footprint.
During a conference call with investors Thursday morning, CEO David Graziosi said the deal aligns with the company’s strategic priority to expand into emerging markets.
Allison first announced the proposed acquisition on Wednesday. The company said the deal would create approximately $120 million in annual cost savings and boost net sales by nearly $3 billion.
Dana’s off-highway business operates in more than 25 countries and employs about 11,000 people. Allison Chief Financial Officer Scott Mell said last year, about 70% of the business unit’s revenue was generated outside of North America.
“Consistent with our strategic priority of growing our international presence, this transaction will provide Allison with access to new end markets, while also expanding our off highway product offerings in construction, mining and agricultural sectors, all while preserving our current portfolio mix that has historically been less cyclical than the broader end markets,” Mell said.
Graziosi said while Allison has its own global presence in countries such as Hungary, India, and the Netherlands, the company’s footprint has been “very much focused” on North America. He said there is a “tremendous amount of opportunity” for growth with the acquisition.
“One of the challenges that we’ve had as a business is really accessing certain markets for growth,” Graziosi said. “Part of this transaction [being] attractive to us…is having a platform to actually be in market, so to speak. And certainly with some developments earlier this year in terms of tariffs and non-tariff barriers, this transaction opens up and mitigates, from our perspective, a number of those barriers.”
Allison has not specified precisely how many employees will be coming on board with the acquisition.
The boards of directors of both companies have approved the deal, which is expected to close in the fourth quarter, pending customary regulatory approvals.
Allison Transmission is Indiana’s 18th-largest public company with just over $3 billion in revenue in 2023, according to IBJ research. The company employs about 3,500 people, including 2,800 in Indiana.