- American Axle & Manufacturing has agreed to buy Dowlais in a £1.2bn deal
The US automotive supplier buying Dowlais Group is planning a secondary listing of its shares in London after the deal goes ahead.
American Axle & Manufacturing agreed to acquire the car parts producer in a $1.4billion (£1.2billion) deal announced in January, just two years after Melrose Industries spun Dowlais out of its GKN Automotive division.
American Axle said at the time it would seek to cancel the trading of Dowlais shares in London and list the enlarged firm on the New York Stock Exchange.
However, the Michigan-based business now wants a secondary listing of its shares in the UK capital as part of the acquisition.
It said this would ‘ensure a greater range of both existing and prospective shareholders are able to access the future value creation opportunity of the combination’.
American Axle’s pursuit of Dowlais follows choppy electric vehicle demand and increasing competition from Chinese automakers, which benefit from generous public subsidies and large domestic demand.
Results: American Axle & Manufacturing, the US automotive supplier buying Dowlais Group, intends to have a secondary listing of its shares in London
The enlarged group will benefit from greater scale and diversification, and create the financial strength to boost investment in new products and technologies.
Following the deal, the merged group will have 50,000 staff members, with around 1,250 staff at risk of redundancy.
Among the jobs threatened with the axe are duplicate head office, administrative and senior management positions, as well as research and development jobs in the US and Europe.
Dowlais’ London office in Victoria will also shut down, while its chief executive, Liam Butterworth, will stand down after gaining a £928,500 payment.
In a statement on Friday, American Axle said both firms ‘continue to believe that the strategic rationale for the combination remains compelling’.
It added that the transaction ‘will create a stronger business that is resilient across customers, geographies and products, resulting in the combined group being better positioned to navigate and succeed in an increasingly dynamic automotive industry and macroeconomic environment’.
Dowlais Group shares were 0.8 per cent higher at 67.8p on Friday morning.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .