Cummins Announces $3.7B Deal To Buy Meritor

Cummins had already started launching its own electric powertrains, but with Meritor on-board, this trend will be accelerated.

Cummins

Andrei Nedelea

By: Andrei Nedelea

Mar 1, 2022 at 8:30am ET

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Cummins may be all about diesel engines, but the heads of the company know that they need to start looking into electric or electrified powertrains, which is why they want to buy Meritor. This company is over a century old and today a global supplier of commercial vehicle components, with plenty of electric powertrain experience.

The acquisition still needs to be approved by the Meritor board of directors, but apparently everyone is on-board and the deal is expected to go through. Cummins will pay $3.7-billion to take over Meritor and its almost 10,000 employees, with a product portfolio that includes commercial vehicle drivetrains, mobility, braking and electric powertrains, among others.

Cummins electrification

According to Tom Linebarger, Cummins Chairman and CEO,

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The acquisition of Meritor is an important milestone for Cummins. Meritor is an industry leader, and the addition of their complementary strengths will help us address one of the most critical technology challenges of our age: developing economically viable zero carbon solutions for commercial and industrial applications.

Climate change is the existential crisis of our time and this acquisition accelerates our ability to address it. Our customers need economically viable decarbonized solutions.

In addition, our communities and our planet depend on companies like Cummins to invest in and develop these solutions. This acquisition adds products to our components business that are independent of powertrain technology, and by leveraging our global footprint we expect to accelerate the growth in Meritor’s core axle and brake businesses.

Cummins currently sells diesel engines with displacements between 2.8 and 95 liters, for a very wide range of applications, not just automotive. It recently started launching its own electric powertrain solutions, the most recent we found being a fully electric solution for airport terminal tractors called PowerDrive 8000. Once the Meritor merger materializes, Cummins will surely accelerate the development and rollout of such solutions.