British automotive firm Dowlais Group has agreed to a £1.16 billion ($1.44 billion) cash-and-shares takeover by U.S. manufacturer American Axle & Manufacturing, the companies announced Wednesday. The transaction is expected to position the merged entity as a leading global supplier of automotive components.
The boards of American Axle & Manufacturing Inc. and Dowlais Group PLC confirmed they have reached terms on a recommended offer. As a result, Dowlais—comprising the former automotive and powder metallurgy divisions of GKN—will be delisted from the London Stock Exchange.
Financial Terms and Shareholder Benefits
Under the deal, existing Dowlais shareholders will receive 0.0863 new shares in American Axle and 42 pence in cash for each Dowlais share they own. Additionally, Dowlais will issue a final cash dividend of up to 2.8 pence before the transaction closes.
A “mix and match” arrangement will allow shareholders to adjust the proportion of cash and shares they receive. The offer values each Dowlais share at 85.2 pence, representing a 25% premium over its Tuesday closing price of 68.35 pence. By midday Wednesday, Dowlais’ stock had surged nearly 13% on the FTSE 250 index.
