AAM and Dowlais win Chinese antitrust approval for $1.44bn merger

Core Viewpoint - American Axle & Manufacturing (AAM) and Dowlais Group have received Chinese antitrust clearance, completing regulatory approvals for their planned merger set for February 2026 [1][5]. Group 1: Merger Details - The merger deal, valued at approximately $1.44 billion, was struck in January last year, involving a cash-and-share transaction [2]. - Under the agreement, Dowlais shareholders will receive 0.0863 new AAM common shares and 42 pence in cash for each Dowlais share, along with potential additional payments linked to Dowlais' FY24 final dividend [2][3]. - Post-merger, AAM investors are expected to control 51% of the combined entity, while Dowlais shareholders will own 49% [3]. Group 2: Valuation and Premium - The transaction values Dowlais at 85.2 pence per share, reflecting a 25% premium over Dowlais' closing share price on January 28, 2025 [3]. Group 3: Business Operations - Dowlais Group operates in automotive engineering and car parts manufacturing, with businesses including GKN Automotive and GKN Powder Metallurgy across 70+ facilities in 19 countries [4]. Group 4: Strategic Rationale - The strategic rationale for the merger is to create a global leader with enhanced financial strength, broader diversification, and a market-leading product portfolio in both traditional and electrified powertrain solutions [4]. Group 5: Regulatory Approvals - The merger has received approvals from multiple jurisdictions, including the US, India, the UK, South Korea, Taiwan, Turkey, and the European Commission, totaling seven out of ten required jurisdictions [5]. - The final approval is contingent on a court hearing scheduled for January 30, 2026 [5].