American Axle To Buy Metaldyne Performance For $1.6 Billion, a 52% Premium Per Share

By Markets MarketWatch Pulse

American Axle & Manufacturing Holdings Inc. announced Thursday a deal to buy fellow vehicle components maker Metaldyne Performance Group Inc. for $1.6 billion in cash and stock, and the assumption of $1.7 billion in debt. Under terms of the deal, each MPG share will be exchanged for $13.50 in cash and 0.5 share of American Axle. Based on Wednesday's closing prices, the deal values MPG shares at about $21.81 each, which represents a 52% premium. American Axle expects the deal to add to cash flow and earnings in the first full year after closing. The company expects synergies of $100 million to $120 million by 2018. "MPG's expertise in complex, highly-engineered powertrain components and its global footprint will be tremendous assets to AAM," said American Axle Chief Executive David Dauch. Neither stock is active in premarket trade. MPG shares have tumbled 22% year to date, while American Axle's stock has dropped 12% and the S&P 500 has gained 2.6%.

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