Cummins completes acquisition of Meritor

Cummins Inc. announces the completion of the acquisition of Meritor Inc., a leading global provider of drivetrain, mobility and braking systems, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets.

The integration of Meritor's people, products and capabilities in axle and brake technology will position Cummins as a leading provider of integrated powertrain solutions in internal combustion and electrification applications.

As demand for decarbonized solutions advances, ePowertrains will be instrumental in integrating hybrid and electric powertrains, creating performance differentiation and the opportunity to deliver advanced clean mobility products to customers. Cummins aims to provide market-leading decarbonized solutions to global customers, accelerating Meritor's investment in electrification and integrating development into its New Power business.

The acquisition of Meritor also adds products to Cummins' components business that present attractive growth opportunities across the company's range of power solutions and applications. Cummins expects to utilize its global presence to accelerate the growth of these core axle and brake businesses, serving commercial truck, trailer, off-highway, defense, specialty and aftermarket customers around the world.

“We are excited to welcome Meritor employees to Cummins. Together, Cummins and Meritor will move further and faster in developing economically viable decarbonized powertrain solutions that are better for people and our planet,” said Jennifer Rumsey, president and CEO of Cummins.

For Tom Linebarger, executive chairman of Cummins, “Cummins can help expand Meritor's core business due to our sales and service network and customer relationships around the world and this acquisition has clear synergies for both companies that will position us for future investments during our industry’s technology transition. We are relentless in our Destination to Zero focus, our strategy to achieve zero emissions and will lead the transition to decarbonized energy. This acquisition is an important step in executing our strategy.”

As previously announced, the Meritor acquisition is expected to be immediately accretive to Cummins' adjusted earnings per share and generate annual pre-tax synergies of approximately $130 million in the third year following closing, which is expected to be comprised of, among other things, through savings in SG&A, supply chain operations and facility optimization. Cummins financed the acquisition, which had a total transaction value of approximately $3,7 billion, including debt assumed and net cash acquired, using a combination of cash on Cummins' balance sheet, commercial paper and debt. The company remains committed to maintaining its strong credit ratings.