Cummins buys Meritor, aims to ‘accelerate’ EVs

Engine manufacturing giant Cummins is entering a US$3.7 billion deal to purchase commercial vehicle component manufacturing giant Meritor with the aim of accelerating development of electric heavy vehicles. 

Meritor is an industry leader in axle and brake technology and the merger will strengthen Cummins’ ability to provide powertrain solutions across combustion and electric power applications.

In announcing the deal, Cummins says it’s “the right time to pursue this combination as demand for decarbonised solutions accelerates”.

It says e-axles will be “a critical integration point” within hybrid and electric drivetrains. Meritor’s investment in electrification and integrating development within its New Power business allows Cummins to deliver market-leading solutions to global customers, it adds. 

Meritor is headquartered in Troy, Michigan and has more than 9600 employees serving commercial truck, trailer, off-highway, defence, specialty and aftermarket customers around the world.

Cummins chairman and chief executive Tom Linebarger says the acquisition is an important milestone. 

“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 improves our ability to address it. Our customers need economically viable decarbonised 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,” Linebarger says. 

Meanwhile, Meritor president and chief executive Chris Villavarayan says customers will benefit from enhanced capabilities in technology and the ability to expand investment in axle and brake development and EV adoption.

“Our offerings will continue to play an important, strategic role as commercial vehicles transform to become electric and autonomous. 

“Our global team members and their commitment to excellence helped make this transaction possible and will fuel our innovations as we embark on this next chapter in our longstanding legacy,” Villavarayan says. 

Cummins is headquartered in Columbus, Indiana and employs around 59,900 people. 

It serves customers online, through a network of company-owned and independent distributor locations, and through thousands of dealer locations worldwide and earned about US$2.1b on sales of US$24b in 2021.