American Axle Plans Secondary London Listing After Dowlais Acquisition
Investor from Detroit sets sights on secondary Stock Exchange listing post-acquisition of Dowlais company
Hop on board, folks! American Axle & Manufacturing, a US automotive supplier, is set to get a secondary listing of its shares on the London Stock Exchange following its takeover of Dowlais Group – the former GKN Automotive owner.
If you remember, American Axle agreed to buy Dowlais in a jaw-dropping $1.4 billion deal back in January, barely two years after Melrose Industries spun Dowlais out of their division. At the time, American Axle expressed intentions to cancel trading of Dowlais’ shares in London and list the enlarged company on the New York Stock Exchange. However, it looks like the Michigan-born business is now yearning for a piece of the UK capital too. Why, you ask? To expand investor access, that's why!
This move will provide a diverse pool of existing and prospective shareholders with a chance to grab a slice of the future value creation opportunity resulting from the combination. With choppy electric vehicle demand and growing competition from Chinese automakers, it seems American Axle is betting on the magic of London to smoothen out the ride.
Following the deal, the merged group will sport a beefy workforce of 50,000, with around 1,250 employees potentially facing the axe. Don’t worry; there might be some head office, administrative, senior management, research, and development roles up for grabs in the US and Europe.
GKN Automotive Owner Bites the Dust in £1.2bn Deal
So long, Dowlais! The London office in Victoria will shut down, and Liam Butterworth, the CEO, is stepping down after pocketing a cool £928,500. American Axle and Dowlais still stand by the deal, believing it to be a golden ticket for a stronger business, capable of navigating the automated automotive industry and macroeconomic environment.
The Dowlais Group shares are up 0.8%, so it seems investors are quite pleased with this turn of events.
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American Axle & Manufacturing, as part of its expansion, is now looking to list some shares on the London Stock Exchange, aiming to widen the scope of potential investors in the finance industry. This move is expected to create a diverse investor base, offering them the opportunity to profit from the combined value created by the merger of American Axle and Dowlais Group, two key players in the automotive industry.
