Cummins-Meritor Details Integration Benefits

Cummins-Meritor finalized its acquisition last August, and company officials say the move allows broader access to technology, resources and global opportunities.

Alan Rabadi, general manager of global aftermarket and business development at Cummins-Meritor, said the acquisition of Meritor has three main benefits. During a media briefing at Heavy Duty Aftermarket Week in Grapevine, Texas, earlier this month, he said the acquisition:

• enhances commercial vehicle powertrain offerings,
• helps accelerate development of electric vehicle technologies and products, and;
• improves financial strength.

The combination of EV technology and products will help the companies accelerate the development of electric powertrains.

“Cummins has made significant investments over the past several years in developing our pathway to zero emissions, and that has been focused on batteries, fuel cells and related technologies,” he said. “Meritor, independently, has been developing their e-powertrains and related technologies. Now as we bring those together, we see the ability to expedite technological advancements, but also further improve the technologies we develop together.”

The acquisitions immediately reduces operating costs by combining overlap on the corporate level, such as downsizing from two boards of directors to one. But the overlap in the customers that both Meritor and Cummins serve also allows the company to respond to customer needs better, he said.

“The deal thesis assumes that we're going to be able to create more value by operating as one company than the sum of the parts as two separate entities,” Rabadi said.

The combined company also gives broader global opportunities.

“Both companies have footprints all over the world,” he said. “There is not perfect overlap. So, if you're working in one region, one part of the business, we now have access to different parts of the business, different parts of the world. So as an employee at either company, you’ve got access to a broader set of opportunities long term.”

What Happened to the Meritor Brand After the Cummins Acquisition?

“The Meritor product name remains,” Rabadi said. “The product has a lot of brand equity, people will recognize it in the market. We're not going to go and scrub Meritor from the products. That remains.”