Eaton Completes Sale of Its Hydraulics Business for $3.3 Billion

Rhea-AI Summary

Eaton (NYSE:ETN) has finalized the sale of its Hydraulics business to Danfoss A/S. This business generated $1.8 billion in sales for 2020 and was recognized as a leader in hydraulics components and services. The chairman and CEO, Craig Arnold, emphasized that this sale is pivotal in Eaton’s ongoing transformation into a higher growth company with consistent earnings. Following this transaction, Eaton will focus on its four core businesses: Aerospace, Electrical, eMobility, and Vehicle, with the majority of profits stemming from Electrical and Aerospace.

Positive

• Completion of Hydraulics business sale creates value for shareholders.
• Focus on four core businesses enhances growth potential.

Negative

• Potential risks associated with executing the transformation strategy.

Power management company Eaton (NYSE:ETN) today announced it has completed the sale of its Hydraulics business to Danfoss A/S, a Danish industrial company.

Eaton’s Hydraulics business, which had sales of $1.8 billion in 2020, is a global leader in hydraulics components, systems, and services for industrial and mobile equipment.

“The completion of this sale marks another milestone in Eaton’s continued transformation into a higher growth company with more earnings consistency,” said Craig Arnold, Eaton chairman and chief executive officer. “This transaction creates considerable value for our shareholders and enables our hydraulics employees to be part of a company with a strong commitment to the hydraulics industry.”

Eaton now has four global businesses – Aerospace, Electrical, eMobility and Vehicle – with Electrical and Aerospace accounting for the majority of the company’s profit.

Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services. We provide sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power – more safely, more efficiently, and more reliably. Eaton’s 2020 revenues were $17.9 billion, and we sell products to customers in more than 175 countries. We have approximately 85,000 employees. For more information, visit Eaton.com.

This news release contains forward-looking statements concerning Eaton’s transformation into an intelligent power management company. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control, including unexpected difficulties in executing on our transformation strategy. We do not assume any obligation to update these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210802005444/en/

FAQ

What is Eaton's recent business transaction?

Eaton has completed the sale of its Hydraulics business to Danfoss A/S.

What were the sales figures for Eaton's Hydraulics business?

Eaton's Hydraulics business had sales of $1.8 billion in 2020.

What is the significance of this sale for Eaton?

The sale is part of Eaton's transformation strategy to become a higher growth company.

Which businesses will Eaton focus on after the sale?

Eaton will focus on its Aerospace, Electrical, eMobility, and Vehicle businesses.

What percentage of Eaton's profit comes from Electrical and Aerospace?

Electrical and Aerospace account for the majority of Eaton's profit.