By Ian Walker
Dowlais Group agreed to a 1.16 billion pounds ($1.44 billion) cash-and-share takeover by American Axle & Manufacturing Holdings.
Under the deal, accepting shareholders of the London-listed automotive engineering group will get 0.0863 new AAM shares and 42 pence in cash. In addition they will also be entitled to a final dividend of up to 2.8 pence upon completion of the deal and approval of the Dowlais board, the companies said Wednesday.
The terms of the offer imply a value of 85.2 pence per Dowlais share, based on AAM's closing share price on Tuesday. This is a 25% premium to Dowlais' closing share price of 68.35 pence on Tuesday.
Upon completion of the deal, Dowlais shareholders will own 49% of the enlarged group with AAM shareholders owning the rest.
AAM said the merger would create significant annual run rate cost synergies of $300 million, which are expected to be mostly achieved by the end of the third year from completion.
The combined board will be lead by AAM's David C. Dauch in the role of chairman and chief executive officer. Dowlais' Chief Financial Officer Roberto Fioroni will also join the board in an executive role alongside Helen Redfern, Markus Bannert and Jean-Marc Durbuis.
In addition Dowlais' Chair Simon Mackenzie Smith and Fiona MacAulay will join the board upon completion.
"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," Dauch said.
Given the takeover agreement Dowlais has cancelled its share buyback program.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
January 29, 2025 02:37 ET (07:37 GMT)
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