US auto-parts maker AAM to buy Metaldyne Performance Group for $1.6 bn
03 November 2016
US auto-parts maker American Axle & Manufacturing Holdings Inc (AAM) today struck a deal to buy Metaldyne Performance Group Inc (MPG) for about $1.6 billion in a cash-and-stock in order to strengthen its powertrain and drivetrain portfolio.
Including MPG's $1.7 billion debt, the deal is valued at $3.3 billion.
Under the terms of the deal, AAM will pay $13.50 per share in cash and 0.5 share of AAM common stock.
Upon closing, AAM's shareholders will own approximately 70 per cent of the combined company and MPG's shareholders will own the remaining 30 per cent.
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the first half of 2017.
AAM said that it expects targeted annual cost synergies to be between $100 and $120 million by 2018.
MPG is a provider of highly-engineered lightweight components for use in powertrain and suspension applications for the global light, commercial and industrial vehicle markets.
It produces these components and modules using complex metal-forming manufacturing technologies and processes for a global customer base of vehicle OEMs and Tier I suppliers. MPG has a global footprint spanning more than 60 locations in 13 countries across North America, South America, Europe and Asia and employs around 12,000 people.
The proposed acquisition will create a global leader in powertrain, drivetrain and driveline, and the ability to deliver a wide range of quality, highly engineered components, modules and sub-systems across multiple engine, transmission and driveline applications.
AAM's transformational acquisition of MPG brings together two complementary Tier 1 organizations to create a company with greater scale and increased diversity across products, customers and end markets," said David Dauch, AAM's chairman and CEO.
"MPG's expertise in complex, highly-engineered powertrain components and its global footprint will be tremendous assets to AAM. We are excited about the powerful industrial logic in this combination that will allow us to create additional value for our customers and other key stakeholders,'' he added.
"MPG and AAM share a similar culture and value system, laser focused on quality, operational excellence and technology leadership, which creates a natural fit and clear path to value creation for stakeholders of both companies," said, George Thanopoulos, CEO of MPG.
AAM manufactures and designs driveline and drivetrain systems and related components and modules, chassis systems, electric drive systems and metal-formed products for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles.