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Dowlais, the British car parts specialist, has struck a significant deal with American Axle & Manufacturing, valued at £1.2 billion, marking yet another UK public company attracting interest from across the Atlantic. The cash-and-stock offer, which values Dowlais shares at 85.2p each, represents a 25 per cent premium on Tuesday’s closing price.
The proposed merger will see Dowlais shareholders owning approximately 49 per cent of the combined entity. Liam Butterworth, Dowlais’ chief executive, described the deal as “a compelling opportunity” for investors, whilst maintaining openness to other potential suitors.
Dowlais, which emerged from the spun-off operations of Melrose Industries, comprises GKN’s powder metallurgy business and automotive operations. The company has faced challenges since its London Stock Exchange listing in April 2023, particularly within its ePowertrain division, amid weakness in the electric vehicle market.
The merger is expected to generate substantial synergies, with cost savings and revenue benefits projected at $300 million. These efficiencies will be achieved through enhanced supplier negotiations, facility consolidation, and fixed cost reductions.
This latest transatlantic deal follows a surge in American takeovers of UK companies, as interest rates stabilise and political certainty improves in both markets. Notable recent acquisitions include DS Smith and Wincanton, with the total value of US acquisitions of UK-listed companies doubling to $15.2 billion in the year to mid-October 2024.
The deal has received positive feedback from Dowlais’ shareholder base, who recognise the strategic rationale behind the merger. The combined entity is positioned to leverage complementary product portfolios and technological expertise, strengthening their competitive position in a challenging automotive sector.
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