Eaton spins off mobility division
For over 100 years, Eaton has been a publicly listed company. The spin-off is expected to follow a similar path to that of Daimler Truck, whereby every Daimler shareholder received additional Daimler Truck shares in proportion to their existing holdings. It is looking like Eaton shareholders will similarly receive additional shares in the new Mobility Group, as suggested by the statement that the planned spin-off on the New York Stock Exchange is intended to be tax-free for Eaton shareholders under US federal income tax regulations. However, it is also theoretically possible that the spinoff will involve a partial IPO — as in the case of Traton, where shareholders of the parent company Volkswagen did not automatically receive Traton shares but instead new shares were issued and sold on the stock exchange.
Eaton’s management has justified the move by explaining that, as part of its 2030 growth strategy, the company aims to focus on higher-growth, higher-margin business segments in the electrical engineering and aerospace sectors. The spin-off of the Mobility Group is expected to have an immediate positive impact on Eaton’s organic growth and operating margin following the completion of the transaction.
The future independent Mobility Group will act as a global partner for technical solutions for OEMs of commercial vehicles, passenger cars, and off-highway vehicles, leveraging its strong market position and industry-leading technologies. The company’s focus is not limited to battery-electric vehicles but extends to vehicles of all drive types. The Mobility Group is committed to delivering mission- and safety-critical technical solutions for the generation, distribution, and optimisation of energy across all vehicle types and powertrains.
The Mobility Group positions itself as a leader in fuses for electric vehicles while also playing a key role in transmissions and clutches for commercial vehicles in North and South America. According to its own vision, the Mobility Group acts as a “true innovation partner for the electrification needs of OEM customers,” offering comprehensive industry expertise, proprietary technologies, and system integration.
By separating from Eaton, the Mobility Group is expected to gain greater flexibility to capitalise on short- and long-term growth opportunities, particularly in markets where it is well-positioned with leading technologies for heavy-duty, medium-duty, and light-duty commercial vehicles, passenger cars, and off-highway vehicles.
Leveraging Independent Growth Opportunities
Paulo Ruiz, CEO of Eaton, stated: “We are incredibly proud of what our Mobility team has built, and we believe now is the right time to spin off this business unit. As an independent company, Mobility will build on its strong position as a global leader and have the strategic direction and agility to optimally deploy capital and resources to best serve its customers, pursue independent growth opportunities, and drive innovation.”
Eaton has made headlines in the field of electric mobility in recent years: in 2021, the company acquired the charging station provider Green Motion from Switzerland. Later, Eaton, in collaboration with the Swiss firm AMP IT, offered building owners in Switzerland a comprehensive solution for electric vehicle charging. Most recently, Eaton partnered with ChargePoint to develop a charging solution called ChargePoint Express Grid, which can deliver up to 600 kW of power for electric passenger cars and megawatt charging capacities for heavy-duty commercial vehicles. Additionally, Eaton collaborated with e-powertrain specialist BAE Systems to develop electric powertrain solutions for commercial vehicles.
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