Cummins Acquiring Meritor in $3.7 BILLION Deal to Prepare For EVs and Self-Driving Trucks

Columbus, IN; Troy, MI — Cummins Inc. is acquiring Meritor, Inc. in a blockbuster multi-billion dollar deal.

On Tuesday, the two companies announced a definitive agreement in which Cummins (NYSE: CMI) will pay $36.50 in cash per Meritor (NYSE: MTOR) share, for a total transaction value of approximately $3.7 billion, including assumed debt and net of acquired cash.




 

Calling the deal an “important milestone,” Cummins Chairman and CEO Tom Linebarger said the acquisition will “address one of the most critical technology challenges of our age: developing economically viable zero carbon solutions for commercial and industrial applications.”

In a release, Cummins noted the purchase of Meritor will add products to its components business that are independent of powertrain technology.




 

Plus, Cummins believes that by leveraging its global footprint it can accelerate the growth in Meritor’s core axle and brake businesses.

According to CEO and President of Meritor Chris Villavarayan, a driving force behind the timing of this massive deal is due to the expected widespread adoption of electric and autonomous semi-trucks.

“Our offerings will continue to play an important, strategic role as commercial vehicles transform to become electric and autonomous,” said Villavarayan. “Customers will benefit from enhanced capabilities in technology and the ability to accelerate investment in axle and brake development and EV adoption.”

 

Meritor is headquartered in Troy, MI, and has more than 9,600 employees serving commercial truck, trailer, off-highway, defense, specialty and aftermarket customers around the world.

The Board of Directors of Meritor has unanimously approved the agreement.

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 year.




 

As for Cummins — which is based in Columbus, IN, employing approximately 57,800 people — it intends to finance the transaction using a combination of cash on the company’s balance sheet and debt.

The company’s products already range from diesel, natural gas, electric and hybrid powertrains and powertrain-related components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, batteries, electrified power systems, hydrogen generation and fuel cell products.

 


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