Global component and technology supplier, Eaton has announced it intends to pursue the separation of its Vehicle and eMobility segments which together are know as the “Mobility Group” or “Mobility”, and spoon them off into an independent, publicly listed company.
Eaton’s chief executive officer, Paulo Ruiz, said that the separation of Mobility advances Eaton’s bold new 2030 growth strategy to lead, invest, and execute for growth.
“Our team will have a sharpened focus on our core Electrical and Aerospace businesses, which are driven by powerful megatrends including in electrification, digitalization and AI, reindustrialization, infrastructure spending and growth in the aerospace after-market and defense demand,” Ruiz said.
“We are confident that Eaton is exceptionally well‑positioned to capitalize on opportunities to accelerate growth and margin expansion, and to create long‑term value for our shareholders,” he added.
“We are incredibly proud of what our Mobility team has built and believe that now is the right time to separate that business and as an independent company,Mobility will be able to build on its strong foundation as a leading supplier across the globe and have the strategic focus and agility to allocate capital and resources to best serve its customers, pursue independent growth opportunities, and drive innovation,”Ruiz continued.
Eaton proclaimed that on completion of the ‘separation,’ it will be well positioned to execute its 2030 growth strategy by prioritising allocation of capital on higher-growth, higher-margin businesses with more earnings consistency. Eaton will have a focused portfolio, strengthened by the recent acquisition of Ultra PCS and the announced acquisition of Boyd Thermal, primed to capitalise on strong demand in data center, utility, commercial and institutional markets, as well as Aerospace’s growing position in defense industry and commercial aftermarket.
The company said that the separation of the Mobility Group will build on Eaton’s track record of value creation and portfolio transformation and follows the divestitures of Lighting in 2020 and Hydraulics in 2021.
The company added that the separation of the Mobility Group is expected to immediately add to Eaton’s organic growth and operating margin.
It said that the Mobility operation will provide mission-critical and safety-critical engineered solutions responsible for creating, distributing and optimising power for all types of vehicles and propulsion systems, with a leading position in commercial truck transmissions and clutches in the Americas, as well as high-voltage EV fuses and valve actuation technologies around the world.
It added that the business will operate as a true innovation partner for OEM customers’ electrification needs, offering deep domain knowledge, proprietary technology and system-level integration.
It went on to say that it believed the separation will allow Mobility to be more flexible and to pursue near and long term growth opportunities, including markets where it is well positioned with leading technologies serving heavy, medium and light duty trucks, passenger vehicles and off-highway vehicles.
The company says that through the transaction, Eaton and Mobility will be each expected to benefit from an increased focus on core businesses and strategic priorities, a tailored capital allocation strategy with flexibility to invest in profitable organic and inorganic growth opportunities, improved ability to adapt quickly to leverage evolving market dynamics to deliver consistent returns and distinct investment profiles that position each company to unlock greater long-term sustainable value.
Eaton said it expects to complete the anticipated spin-off by the end of the first quarter of next year, and it is subject to the satisfaction of legal and regulatory requirements and approvals, including final approval of the Company’s board of directors and effectiveness of a registration statement filed with the U.S. Securities and Exchange Commission.
Eaton was founded in 1911, and says it has continuously evolved to meet the changing and expanding needs of its stakeholders, and in 2024 recorded revenues of nearly $US25 billion serving customers in more than 160 countries.
