American Axle Drives £1.16bn Acquisition of Dowlais in UK
Deal News | Jan 30, 2025 | EIN
Detroit-based American Axle & Manufacturing is set to acquire Dowlais, the UK car parts group, for £1.16 billion in a cash-and-stock transaction. The acquisition comes as both parties aim to scale their operations amid the automotive industry's shift towards electric vehicles. This deal marks a significant movement out of the London Stock Exchange, which has seen a substantial number of exits recently. M&A advisory comes from a joint team of A&O Shearman, Slaughter and May, and Cravath Swaine & Moore, covering legal and antitrust issues along with the transaction's financing. With the merger, American Axle seeks a more diversified business model and geographic presence, projecting a combined revenue of $12 billion and $300 million in annual cost savings. Completion is targeted by the end of 2025 following regulatory and shareholder approval.
Sectors
- Automotive Industry
- Financial Services
- Legal Services
Geography
- United States – American Axle & Manufacturing is based in Detroit, and several US-based law firms are involved in the transaction.
- United Kingdom – Dowlais, the acquired company, is based in the UK, and the deal marks an exit from the London Stock Exchange.
Industry
- Automotive Industry – The article involves American Axle & Manufacturing and Dowlais, which are key players in automotive components and vehicle manufacturing.
- Financial Services – Investment banks like JP Morgan, Barclays, and Rothschild & Co are participating as financial advisors in this acquisition deal.
- Legal Services – Several law firms including A&O Shearman, Slaughter and May, and Cravath Swaine & Moore are providing legal advisory on the merger.
Financials
- £1.16 billion – Total acquisition price arranged for Dowlais by American Axle.
- 85.2 pence per share – Price per share offered for Dowlais, including a 25% premium.
- $12 billion – Projected combined annual revenue post-merger.
- $300 million – Expected annual cost savings following the merger.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| American Axle & Manufacturing | Bidding Company | Company | An automotive components manufacturer based in Detroit, leading the acquisition of Dowlais. |
| Dowlais | Target Company | Company | The former automotive division of UK engineering firm GKN, specializing in drive systems. |
| A&O Shearman | Legal Advisor | Company | International law firm advising American Axle in the acquisition process. |
| Slaughter and May | Legal Advisor | Company | UK-based law firm advising Dowlais in the transaction. |
| Cravath Swaine & Moore | Legal Advisor | Company | US-based law firm providing counsel to Dowlais on US aspects of the deal. |
| JP Morgan | Financial Advisor | Company | Exclusive financial advisor to American Axle, also providing debt financing. |
| Barclays Bank | Financial Advisor | Company | Financial advisor to Dowlais for the transaction. |
| Rothschild & Co | Financial Advisor | Company | Financial advisor to Dowlais, aiding in the execution of the deal. |