U.S. Auto-Parts Maker American Axle To Buy Britain's Dowlais For $1.4 Billion

Core Viewpoint - American Axle & Manufacturing has agreed to acquire Dowlais Group for approximately $1.44 billion, marking a significant transaction in the automotive parts industry and indicating a trend of U.K. companies leaving the London stock market [1][4]. Group 1: Transaction Details - The acquisition involves a cash-and-shares deal, with American Axle offering a 25% premium on Dowlais' closing price and a 45% premium on its average share price over the past three months [1][2]. - Post-transaction, American Axle will own 51% of the combined entity, while Dowlais' shareholders will retain 49% [2]. Group 2: Financial Implications - The combined entity is projected to generate annual revenues of approximately $12 billion and achieve $300 million in savings by the end of the third year following the transaction [2]. - The deal is expected to enhance cash flow and strengthen the balance sheet of the new entity [2]. Group 3: Industry Context - The merger aims to expand geographic presence and adapt to evolving propulsion trends in the automotive industry, which is transitioning towards electric vehicles [3]. - Both companies produce automotive parts for internal combustion engines, hybrids, and electric powertrains, amidst increasing competition from Chinese manufacturers [3]. Group 4: Historical Context - Dowlais has been listed in London since April 2023, following its spin-off from Melrose Industries, and has seen a 38.5% decline in stock value since its debut [4][5]. - The company has a rich history dating back to the Dowlais Ironworks founded in 1759 and currently employs around 30,000 people across more than 70 manufacturing facilities in 19 countries [5].