American Axle & Manufacturing (AXL) said early Wednesday it reached an agreement on the terms for an offer to acquire the UK-based Dowlais Group (LON: DWL) in a $1.44 billion stock-and-cash deal.

The planned acquisition represents a 25% premium to Dowlais' closing share price on Tuesday.

Dowlais shareholders will receive 0.0863 shares of the new American Axle common stock, 42 pence per share in cash, and up to a 2.8 pence of Dowlais fiscal 2024 final dividend for each share of Dowlais common stock under the terms agreed with the Dowlais board.

American Axle anticipates the deal will likely deliver about $300 million in annual run rate cost synergies and "high" earnings accretion in the first full year following the close. Its revenue expectation from the combined group is about $12 billion annually.

The acquisition creates a global driveline and metal-forming supplier with a "comprehensive product portfolio and diversified customer base," American Axle said. Its shareholders will likely own about 51% of the combined group, while their Dowlais counterparts will own the remaining portion upon closing.

Shares of American Axle were 2.1% lower in recent premarket activity Wednesday. Dowlais shares trading on the London Stock Exchange were up 12% in regular trading.