Announcement • Feb 03
American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) completed the acquisition of Dowlais Group plc (LSE:DWL) from Melrose Industries PLC (LSE:MRO) and others.
American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) entered into a scheme of arrangement to acquire Dowlais Group plc (LSE:DWL) from Melrose Industries PLC (LSE:MRO) and others for £1.2 billion on January 29, 2025. Under the terms of the Combination, each Dowlais Shareholder will be entitled to receive, 0.0863 New AAM Share, £0.42 per share in cash, and up to £0.28 in the form of a final cash dividend to be paid (subject to the approval of the Dowlais Board) prior to Completion. Following Completion, it is expected that the Dowlais Shareholders will own approximately 49%, and AAM Shareholders will own approximately 51% stake of Combined Group, with Dowlais Shareholders benefiting from up-front cash consideration and the opportunity to participate in the anticipated future value accretion of the Combined Group. To finance the acquisition, AAM and certain of its subsidiaries entered into a i) Credit Agreement with the lenders party, a First Lien Bridge Credit Agreement, a Second Lien Bridge Credit Agreement. The Backstop Credit Agreement provides for term loans in an aggregate principal amount of £1.6 billion ($1.98 billion) and revolving credit facilities in an aggregate amount of £1 billion ($1.25 billion). The First Lien Bridge Credit Agreement provides for commitments of up to £677 million and the Second Lien Bridge Credit Agreement provides for commitments of up to £402 million. Proceeds of the commitments provided under the Backstop Credit Agreement will be used, together with proceeds of the commitments provided under the Bridge Credit Agreements, to finance the Combination, including the cash consideration payable to Scheme Shareholders and debt refinancing costs, and to refinance in full the Existing Credit Agreement. AAM will have to pay a break fee of £40.2 million in cash, if AAM's Board no longer recommends the Combination or if AAM fails to hold the AAM Shareholders Meeting prior to the Long Stop Date, or if AAM invokes the Conditions, £11.2 million ($14 million), in cash, if AAM Shareholders do not approve the resolutions required to implement the Combination at the AAM Shareholders Meeting and there has been no change in the AAM Board's recommendation.
The transaction is subject to approval by regulatory board / committee, approval of offer by acquirer shareholders, approval of offer by target shareholders, subject to antitrust regulations approvals in Europe, the USA, China, Brazil and Mexico and subject to court approval. The Dowlais Directors, who have been so advised by Barclays and Rothschild & Co as to the financial terms of the Combination, consider the terms of the Combination to be fair and reasonable. Dowlais Directors intend to recommend unanimously that Scheme Shareholders vote in favor of the Scheme at the Court Meeting and Dowlais Shareholders vote in favor of the Resolutions to be proposed at the General Meeting. The AAM Directors have unanimously approved the Combination and intend to recommend that AAM Shareholders vote in favor of the amendment to AAM's certificate of incorporation to increase the number of authorized AAM Shares and the issuance of the New AAM Shares in connection with the Combination. The Combination is expected to complete during the end of calendar year 2025. At closing, this deal is anticipated to be approximately net leverage neutral before synergies, and we expect to have ample liquidity and the transaction is expected strong earnings accretion in the first full year.
David C. Dauch will serve as the Chairman and CEO of the Combined Group. In addition, Roberto Fioroni (CFO, Dowlais), Helen Redfern, Markus Bannert, and Jean-Marc Durbuis, will be invited to join existing AAM executives as part of the senior executive management team of the Combined Group. It is also expected that Simon Mackenzie Smith (Chair, Dowlais) and Fiona MacAulay, who currently serve on the Dowlais Board, will join the Board of AAM following completion of the Combination. On February 24, 2025, AAM announced the successful syndication of the bridge financing to support the announced Combination on January 29, 2025. Prior to the Combination announcement, J.P. Morgan had exclusively underwritten the committed financing to support AAM’s requirements in connection with the Combination. Pursuant to which, subject to the terms and conditions, the Backstop Lenders agreed to provide certain borrowings to finance the Business Combination and expenses payable in connection therewith. As of March 13, 2025, AAM and Dowlais announced the expiration of the waiting period under the U.S. Hart-Scott-Rodino Antitrust for the proposed combination of Dowlais with AAM. As of June 5, 2025, Dowlais has acquired, for nil consideration, and immediately cancelled 27,865,471 ordinary shares of and in the event of the Cancellation, AAM agreed to increase the cash and share consideration payable per Dowlais Share to reflect the reduced number of Dowlais Shares in issue. AAM and Dowlais therefore confirm that the consideration payable per Share under the Combination has been increased such that Dowlais Shareholders will be entitled to receive, for each Dowlais Share held: 0.0881 New AAM Shares; and £0.43 in cash. Under the terms of the Combination, Dowlais Shareholders were also entitled to receive the FY24 Final Dividend of £0.28 per share which was paid on May 29, 2025. As of June 5, 2025, the Dowlais Shareholder Meetings are expected to be held in July 2025. As of June 9, 2025, the special meeting of AAM’s stockholders to approve, among other things, the Charter Amendment and the Share Issuance has been scheduled for July 15, 2025. As of June 19, 2025, Court and General Meeting will be held on July 22, 2025. The Dowlais Directors unanimously recommend that Scheme Shareholders at the Court Meeting and recommend vote in favour. Subject to the satisfaction or, where permitted, waiver of all the Conditions, and subject to the approval and availability of the Court, the Scheme is expected to become Effective in the FY25 and, in any event, prior to the Long Stop Date. The Long stop date for the transaction is June 29, 2026. As of July 15, 2025, AAM shareholders approved the transaction and expected to close in the FY25. As of July 22, 2025, the transaction has been approved by the court and shareholders of Dowlais. As of October 27, 2025, the transaction is approved by European Commission. As of January 16, 2026 China State Administration for Market Regulation has issued a formal notice approving the Combination. The Effective Date of the Scheme is on February 3, 2026. As of January 19, 2026, the transaction has been approved by Chinese antitrust clearance. On January 30, 2026, Dowlais and Dauch announced that the Court had sanctioned the Scheme.
David Walker, Ian MacAllisterJ.P. of Morgan Securities LLC, J.P., Robert Constant and Jonty Edwards of Morgan Securities plc and J.P. Morgan acted as financial advisors, Morgan Securities LLC acted as fairness opinion provider, Deloitte UK acted as accountant, Allen Overy Shearman Sterling LLP acted as legal advisor and Sodali & Co act as proxy solicitor to AAM. The advisory fee agreed upon for J.P. Morgan's services is £20.7 million. This fee is structured such that £2.2 million was payable upon J.P. Morgan delivering its opinion, and the remaining amount is contingent upon the completion of the Combination. The advisory fee agreed upon for Sodali & Co is £0.04 million. Guy Bomford, Adrian Beidas of Barclays Bank PLC from Barclays, Ravi Gupta, Nathalie Ferretti from N.M. Rothschild & Sons Limited acted as financial advisors and Robert Innes, Natalie Cook, Richard Hilton, Isabel Taylor, Jessica Staples, Philippa O'Malley, Charles Cameron, Dominic Robertson and Ed Fife of Slaughter and May, and George F. Schoen and Claudia J. Ricciardi, Saagar Kaul, Ron Creamer, Eric W. Hilfers and Margaret T. Segall of Cravath, Swaine & Moore LLP acted as legal advisors, and Equiniti is registrar for Dowlais.
American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) completed the acquisition of Dowlais Group plc (LSE:DWL) from Melrose Industries PLC (LSE:MRO) and others on February 3, 2026. Trading of Dowlais Shares on the London Stock Exchange (the “ LSE ”) was suspended prior to the commencement of trading on February 3, 2026. It is expected that trading of Dowlais Shares on the LSE will be canceled with effect from February 4, 2026. The combined company will operate under one unified brand: the Dauch Corporation.