Columbus, Indiana-based Cummins Inc. and Dublin, Ireland-based Eaton Corp. Plc plan to form a $1.2 billion joint venture focused on automated transmissions for medium- and heavy-duty commercial vehicles, the companies announced Monday.
Under the terms of the agreement, Cummins will pay Eaton $600 million cash and both companies will have a 50 percent interest in the joint venture.
Representatives of both Cummins and Eatons told IBJ the venture will have no effect on either company’s Indiana employees or production. Cummins has 9,500 employees in Indiana, with most based in Columbus.
The joint venture will do business as Eaton Cummins Automated Transmission Technologies. It will focus on the design, assembly, sales and support of future medium-duty and heavy-duty automated transmissions, and it will also include Eaton’s current generation of these products.
The transaction is expected to close in the third quarter, pending regulatory approvals.
“Our growth strategy includes expanding our product offerings and extending our global footprint by becoming the world’s leading powertrain supplier,” Cummins Chairman and CEO Tom Linebarger said in a written statement. “Our joint venture with Eaton will deliver the most advanced automated transmissions, and develop an integrated powertrain and service network that supports our customers like never before.”
Cummins makes, designs, distributes and sells diesel and natural-gas engines and related technologies. The company has about 55,000 employees worldwide and customers in about 190 countries. Last year, Cummins earned $1.39 billion on sales of $17.5 billion.
Eaton is a power management company that serves the aerospace, electrical, filtration, hydraulics, industrial, plastics and vehicles markets. It serves customers in more than 175 countries and has a workforce of about 95,000 people. The company has Indiana plants in Auburn and South Bend and an electrical supply store in Indianapolis.
In 2016, Eaton earned $1.9 billion on sales of $19.7 billion.