AAM and Dowlais to become a global automotive leader

US-based American Axle & Manufacturing (AAM) — a leading global Tier One automotive and mobility supplier that designs, engineers and manufactures driveline and metal-forming technologies to support electric, hybrid and internal combustion vehicles — has announced that it has reached an agreement with the board of the Dowlais Group plc on the terms of a recommended cash and share offer to be made by AAM for the entire issued and to be issued ordinary share capital of Dowlais for around $1.44 billion in cash and AAM shares.

Dowlais is ‘a portfolio of market-leading, high-technology engineering businesses that advance the world’s transition to sustainable vehicles’; its businesses comprise GKN Automotive and GKN Powder Metallurgy with over 70 manufacturing facilities in 19 countries.

With a combined portfolio of products essential in the manufacturing of internal combustion engine (ICE), hybrid, and electric vehicles (EVs), coupled with an enhanced cost structure, the combined company will be ‘well positioned to serve a diverse customer base spanning multiple geographies and support changing propulsion trends as the industry continues to evolve’.

David Dauch, AAM’s chairman and CEO, said: “This announcement marks another key milestone in our continued long-term growth plan. We are excited to bring together these two outstanding companies to create a leading driveline and metal-forming supplier serving the global automotive industry as it continues to evolve.

Dynamic market environment
The combination will create significant immediate and long-term shareholder value while helping to power a more sustainable future. Together with Dowlais, we will have the powertrain-agnostic product portfolio, global reach, commitment to innovation and financial strength to meet the needs of customers and succeed in a dynamic market environment.”

Dowlais’ chairman Simon Mackenzie Smith added: “The rationale for the combination is clear —together, we create a global leader with enhanced financial strength, broader diversification, and a market-leading product portfolio that spans traditional and electrified powertrain solutions. Importantly, our shareholders will benefit not only from an immediate premium, but also from the significant synergies that this combination will deliver.”

Dowlais’ CEO Liam Butterworth added: “This announcement marks a significant opportunity to build on the success of Dowlais Group. The combination of the two companies accelerates the execution of our strategy by leveraging our combined scale, resources, capabilities, and management teams. Our product portfolios and technological expertise are highly complementary, positioning us to better serve our customers.

“Our shared vision is to be a leading supplier of power-agnostic products as the world transitions to electrified mobility while maintaining operational excellence and driving sustainable growth, improved margins, and stronger cashflow generation.”