MEXICO – Cummins announced that it has completed the acquisition of Meritor, Inc. a leading global provider of powertrain, mobility, braking, aftermarket and electric motor solutions for commercial vehicle and industrial markets.
The integration of Meritor’s people, products and capabilities in axle and brake technology is intended to position Cummins as a leading provider of integrated powertrain solutions in internal combustion and electric power applications.
The company with a presence on the Juarez-El Paso border indicated that as demand for decarbonized solutions accelerates, Epowerare powertrains will be a key integration point within hybrid and electric drivetrains, creating packaging and performance differentiation and the opportunity to offer advanced clean mobility products for customers.
Cummins intends to offer market-leading brazen solutions to global customers by accelerating Meritor’s investment in electrification and integrating the development within its new power business.
The acquisition of Meritor will also add products to Cummins’ components business that present attractive growth opportunities across the company’s range of power solutions and applications. In addition, the company expects to use its global footprint to accelerate the growth of these brake and center axle businesses by serving commercial truck, trailer, off-highway, defense, specialty and aftermarket customers around the world.
“We are very pleased to welcome Meritor employees to Cummins,” said Jennifer Rumsey, Cummins President and CEO. “Together, Cummins and Meritor will move further and faster in developing economically viable decarbonized powertrain solutions that are better for people and our planet.”
The Meritor acquisition is expected to be immediately accretive to Cummins’ adjusted EPS and generate annual pre-tax run-rate synergies of approximately $130 million per year, three after closing, which are anticipated to be comprised of, among other things, SG&A savings, supply chain operations and facility optimization.
Cummins financed the acquisition, which had a total transaction value of approximately $3.7 billion, including assumed debt and the acquired cash net, using a combination of cash on the company’s balance sheet, commercial paper and debt.