LONDON: American Axle & Manufacturing Holdings Inc. (AAM) and Dowlais Group have reached an agreement on the terms of a recommended cash and share offer by AAM for Dowlais’ entirety of issued and to-be-issued ordinary share capital, marking a significant merger for both companies.

The merged entity, referred to as the Combined Group, will emerge as a larger, diversified global manufacturer with a robust portfolio, poised for long-term profitable growth, value-enhancing investments, and sustainable capital returns. This strategic combination is anticipated to generate significant value for shareholders.

Under the terms of the merger, Dowlais shareholders will receive 0.0863 new AAM shares, 42 pence in cash, and up to 2.8 pence in the form of a final cash dividend for each share held. The total implied value of the offer stands at 85.2 pence per Dowlais share, based on the closing price of $5.82 per AAM share as of January 28, 2025, and including the FY24 final dividend.

Upon completion, Dowlais shareholders will own approximately 49% of the Combined Group, while AAM shareholders will hold about 51%. The merged entity will feature a balanced geographic presence, a diversified customer base, and a product range supporting internal combustion engine, hybrid, and electric powertrains.

David C. Dauch, the current Chairman and CEO of AAM, will serve as the Chairman and CEO of the Combined Group. Several senior executives from Dowlais will join the leadership team, including Roberto Fioroni, Helen Redfern, Markus Bannert, and Jean-Marc Durbuis. Simon Mackenzie Smith and Fiona MacAulay from Dowlais will join the AAM Board.

Executives from both companies expressed their enthusiasm about the merger. Dauch highlighted the alignment with AAM’s strategic growth plans and emphasized the creation of long-term shareholder value. Mackenzie Smith pointed to the compelling financial strength, broader diversification, and market-leading product portfolio resulting from the merger. Liam Butterworth, CEO of Dowlais, noted the combined strengths in innovation, technology, and talent would accelerate the execution of their strategy.

The merger between AAM and Dowlais is set to establish a global leader in driveline and metal forming technologies, ready to navigate and innovate within a transitioning automotive industry. This strategic move positions the Combined Group to better serve customers and achieve sustainable growth.