Danfoss Power Solutions has announced it will establish White Drive Motors & Steering as a stand-alone business unit. The company will also prepare to immediately sell the business unit, a necessary step to close the acquisition of Eaton Hydraulics.
White Drive Motors & Steering will offer a portfolio of orbital motor and steering products, as well as other products which Danfoss says will enable it to play a significant role in the mobile hydraulics industry.
Danfoss says the new business unit will be effective February 1, 2021, and will include operations and products at three Danfoss locations in Hopkinsville, KY, in the U.S.; Wroclaw, Poland; and Parchim, Germany.
The company acquired White Drive Products, a manufacturer of hydraulic motors, in 2016. Since then it has been operating under the Danfoss name and added to the company's hydraulics product offering.
However, with the announcement in early 2020 of Danfoss' plans to acquire the Eaton Hydraulics business, the company must now divest the White Drive Products line to "ensure the maintenance of fair competitive levels...and [obtain] the regulatory approvals necessary to close the acquisition of Eaton Hydraulics" it says in its press release announcing the plan.
Once the acquisition of Eaton Hydraulics is completed, the new business will include product lines from Eaton Hydraulics:
- two product lines from Shawnee, OK and
- one from Eden Prairie, MN.
Danfoss says these product lines will be moved, along with some equipment, from Eaton’s plant in Searcy, AR. This transition will include about 800 employees.
“We are committed to finding a good home for the new stand-alone business and we will work closely with the new owner to ensure a smooth transition for all employees, customers and distribution partners,” says Eric Alström, President, Danfoss Power Solutions, in Danfoss' press release about the new business.
“When we signed the agreement to purchase Eaton Hydraulics, we were aware that there could be some aspects from a competition standpoint, that involve discussions with the authorities, with respect to the approval process. The results of the investigations in the European Commission and the U.S. Department of Justice now require us to divest part of the business, in order to ensure approval,” he says.
“The Eaton Hydraulics acquisition is a major game changer for Danfoss. We will unite two of the key global players in hydraulics, creating the broadest offering of products, huge innovation power, robust distribution channels and tremendous geographic reach. We now look forward to completing the process with the authorities and receiving these necessary regulatory approvals,” says Alström.