REG - American Axle & Mfg. Dowlais Group PLC - RECOMMENDED COMBINATION WITH DOWLAIS

DowlaisAnnouncement

29/01/2025 07:00

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RNS Number : 0984V  American Axle & Mfg Hldgs, Inc.  29 January 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

29 January 2025

RECOMMENDED CASH AND SHARE COMBINATION

OF

DOWLAIS GROUP PLC ("DOWLAIS")

WITH

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. ("AAM")

Summary

·         The boards of AAM and Dowlais are pleased to announce that
they have reached agreement on the terms of a recommended cash and share offer
to be made by AAM for the entire issued and to be issued ordinary share
capital of Dowlais (the "Combination").

·       The Combined Group will be a larger, diversified global
manufacturer well-positioned for long-term profitable growth, value-enhancing
investments and sustainable capital returns. The boards of AAM and Dowlais
believe the Combination will generate significant value for both sets of
shareholders. The Combined Group will have the following characteristics:

·      a leading, innovative global driveline and metal forming supplier
with significant size and scale;

·    an increasingly propulsion-agnostic portfolio of products across a
broader range of automotive segments supporting internal combustion engine,
hybrid and electric powertrains;

·      a diversified customer base with expanded and balanced geographic
presence;

·      the opportunity to deliver significant cost synergies of $300
million across the Combined Group;

·      high margins, with strong earnings accretion, cash flow and
balance sheet; and

·   an experienced and blended management and leadership team, with a
proven track record of restructuring, integration and operational excellence.

The Combination

·          Under the terms of the Combination, each Dowlais
Shareholder will be entitled to receive:

 for each Dowlais Share held:  0.0863 New AAM Shares;
                               42 pence in cash; and
                               up to 2.8 pence in the form of a final cash dividend to be paid (subject to
                               the approval of the Dowlais Board) prior to Completion

·             Pursuant to the consideration payable in connection with
the Combination, each Dowlais Shareholder will be entitled to receive the
payment of a final cash dividend by Dowlais of up to 2.8 pence for each
Dowlais Share (the "FY24 Final Dividend") (to be paid (subject to the approval
of the Dowlais Board) in line with Dowlais' ordinary course 2024 financial
year dividend calendar) without any reduction of the consideration payable
under the terms of the Combination.

·          The terms of the Combination represent a total implied
value of 85.2 pence per Dowlais Share, based on the Closing Price of $5.82 for
each AAM Share and £/US$ exchange rate of 1.2434 on 28 January 2025 (being
the close of business on the last Business Day before the date of this
Announcement), and including the FY24 Final Dividend.

·            Immediately following Completion, it is expected that the
Dowlais Shareholders will own approximately 49 per cent., and AAM Shareholders
will own approximately 51 per cent., of the issued and outstanding common
stock of the Combined Group, with Dowlais Shareholders benefiting from
up-front cash consideration and the opportunity to participate in the
anticipated future value accretion of the Combined Group.

·          The Combined Group will have an experienced and blended
management and leadership team. David C. Dauch will serve as the Chairman and
Chief Executive Officer of the Combined Group. In addition, Roberto Fioroni
(Chief Financial Officer, Dowlais), Helen Redfern (Chief People,
Sustainability and Communications Officer, Dowlais), Markus Bannert (Chief
Executive Officer, GKN Automotive), and Jean-Marc Durbuis (Chief Executive
Officer, GKN Powder Metallurgy) will be invited to join existing AAM
executives as part of the senior executive management team of the Combined
Group, in roles to be confirmed. It is also expected that Simon Mackenzie
Smith (Chair, Dowlais) and Fiona MacAulay, who currently serve on the Dowlais
Board, will join the Board of AAM following completion of the Combination.

·          The terms of the Combination (including the FY24 Final
Dividend) value the entire issued and to be issued ordinary share capital of
Dowlais at approximately £1.16 billion on a fully diluted basis and represent
a premium of approximately:

·      25 per cent. to the Closing Price of 68 pence for each Dowlais
Share as at the close of business on 28 January 2025 (being the last Business
Day before the date of this Announcement);

·      45 per cent. to the volume-weighted average price of 59 pence
for each Dowlais Share for the three-month period ended on 28 January 2025
(being the last Business Day before the date of this Announcement); and

·      46 per cent. to the volume-weighted average price of 59 pence
for each Dowlais Share for the six-month period ended on 28 January 2025
(being the last Business Day before the date of this Announcement).

·          The terms represent an implied enterprise value multiple
of approximately 4.1 times Dowlais' adjusted EBITDA for the 12-month period
ended 31 December 2023, and 3.0 times when including full run rate cost
synergies.

·          A Mix and Match Facility will also be made available to
Dowlais Shareholders in order to enable them to elect, subject to off-setting
elections, to vary the proportions in which they receive cash and New AAM
Shares in respect of their holdings in Dowlais Shares. However, the total
number of New AAM Shares to be issued and the maximum aggregate amount of cash
to be paid under the terms of the Combination will not be varied as a result
of elections under the Mix and Match Facility.

·          The AAM Board believes the Combination will create
significant annual run rate cost synergies of $300 million, expected to be
substantially achieved by the end of the third year after Completion.

·          AAM reserves the right to reduce the consideration
payable in respect of each Dowlais Share under the terms of the Combination to
the extent that the FY24 Final Dividend exceeds 2.8 pence per Dowlais Share.
If any dividend or other distribution is announced, declared, made or paid, or
becomes payable, in respect of Dowlais Shares on or after the date of this
Announcement and before the Effective Date, other than the FY24 Final Dividend
or any repurchases of Dowlais Shares by Dowlais pursuant to the Buyback
Programme, AAM reserves the right to reduce the consideration payable in
respect of each Dowlais Share by the amount of all or part of any such
dividend or other distribution. If AAM exercises this right or makes such a
reduction in respect of a dividend, other distribution or return of capital
that has not been paid, Dowlais Shareholders will be entitled to receive and
retain that dividend, other distribution or return of capital. From the date
of this Announcement until the Effective Date, AAM is not permitted to
announce, declare, make or pay any dividend, other distribution or return of
capital and, if AAM does not comply with this restriction, Dowlais shall be
entitled (at its sole discretion) to declare and pay an equalising dividend to
Dowlais Shareholders, without any consequential reduction to the
consideration. Further details are set out in paragraph 13 (Dividends).

·          The Combination is expected to be effected by means of a
Court-sanctioned scheme of arrangement between Dowlais and Scheme Shareholders
under Part 26 of the Companies Act, although AAM reserves the right to elect
to implement the Combination by way of a Takeover Offer, subject to the terms
of the Co-operation Agreement, and obtaining the consent of the Panel.

·          As a result of the announcement of the Combination, the
Dowlais Directors have taken the decision to terminate the Buyback Programme
previously announced, with immediate effect.

·          AAM and Dowlais have agreed certain arrangements whereby
the consideration per Dowlais Share may be increased should certain shares in
Dowlais be cancelled for nil consideration prior to the Effective Date as set
out in paragraph 21 (Melrose ESOT), without increasing the total consideration
payable by AAM pursuant to the Combination.

Background to and reasons for the Combination

·          AAM and Dowlais are leading global tier-one automotive
suppliers specialising in driveline and metal forming technologies for
internal combustion, electric and hybrid vehicles. The combination of AAM and
Dowlais will create a leading global manufacturer with the scale, product
portfolio, technology and global diversification required to lead and innovate
in a transitioning business environment.

·          The AAM Directors believe that the Combined Group will
benefit from a more diversified business model across both customers and
geographies as well as the significant synergies arising from the combination
of AAM and Dowlais. This model will feature a robust cash-generative financial
profile, a strong balance sheet, and a more competitive and margin enhancing
position than the standalone businesses, enabling continued innovation,
growth, and long-term value creation for shareholders as the industry
transitions to alternate propulsion technologies.

·          The Combination will bring together two companies with
highly complementary customer bases, geographic footprints,
powertrain-agnostic product portfolios, and manufacturing operations. It will
benefit from a best-of-best management team and the significant leadership
depth present in both organisations.

·          The Combination offers shareholders the opportunity to
participate in future value creation unlocked through the delivery of these
cost synergies.

Key features of the Combined Group:

·          Leading global driveline and metal-forming supplier with
significant size and scale - AAM and Dowlais expect that the Combined Group
will benefit from greater scale and diversification, which brings numerous
benefits including: financial and operational resilience, enabling the
business to adapt to demand fluctuations and macroeconomic events;
strengthened relationships with customers and other industry stakeholders; a
competitive cost base driven by economies of scale; pooled resources for
R&D and investment, including EV transition and new technologies; and
increased agility and flexibility in a dynamic, fast-moving industry.

·          Comprehensive powertrain-agnostic product portfolio with
leading technology - The Combination will create an industry-leading portfolio
of products across a broad range of automotive segments, supporting internal
combustion engine (ICE), hybrid and electric powertrains. The metal forming
and powder metallurgy product groups will provide both vertical integration
capabilities and further diversification beyond the auto industry. The
Combined Group will benefit from enhanced scale to fund investments in future
innovation in its powertrain-agnostic product portfolio.

·          Diversified customer base with expanded and balanced
geographic presence - The Combined Group will be a truly global supplier,
serving a wide range of vehicles with a well-diversified and complementary
customer base. Additionally, the Combined Group will benefit from a more
balanced regional presence. AAM's position in pickup trucks and SUVs and
Dowlais' position across multiple other vehicle segments globally create an
attractive business portfolio. The combined businesses also have strong
foundations to serve the large and growing Chinese vehicle market, in
particular with emerging domestic Chinese OEMs that are positioned for global
growth. As a result, the Combined Group will be well-positioned to support and
profitably participate in the transition to alternate propulsion technologies
in all regions.

·          Compelling industrial logic with ~$300 million of
synergies - The complementary nature of AAM's and Dowlais' businesses will
enable the creation of significant, annual run rate cost synergies of
approximately $300 million, expected to be substantially achieved by the end
of the third year after Completion. The AAM management team has a proven
acquisition track record, having successfully integrated and delivered
significant cost synergy value through the acquisitions of Metaldyne
Performance Group and Tekfor Group. Additionally, the Dowlais management team
has demonstrated a proven track record of restructuring resulting in
operational improvements.

·          High margins, with strong earnings accretion, cash flow
and balance sheet - The Combined Group's enhanced customer, geographic, and
product diversification supports a best-in-class financial profile with clear
opportunities for improved profitability. The Combination results in an
attractive financial profile within the automotive supplier landscape, with
revenue of approximately $12 billion and Adjusted EBITDA margins of
approximately 14 per cent. (inclusive of run rate synergies). Based on the
terms of the Combination, the Combined Group's day-one net leverage is
expected to be approximately 2.5 times (inclusive of full run rate synergies).
AAM's capital allocation policy will prioritise debt repayment whilst
supporting organic growth until net leverage is below 2.5 times, at which
point AAM intends to move to a more balanced capital allocation policy.

Quantified cost synergies

The AAM Directors, having reviewed and analysed the potential cost synergies
of the Combination, and considering the factors they can influence, are highly
confident in the Combined Group's ability to realise approximately $300
million of annual run rate cost synergies, expected to be substantially
achieved by the end of the third year following Completion.

The quantified cost synergies, expected to originate from the cost bases of
AAM and Dowlais, are anticipated to be realised primarily from:

·          SG&A - approximately 30 per cent. across the
following sources:

o  Eliminating duplicate public company costs and other costs;

o  Optimisation of the combined workforce;

o  Streamlining of engineering, research, and development expenses; and

o  Elimination of duplicate business and technical offices.

·          Purchasing - approximately 50 per cent. across the
following sources:

o  Leveraging enhanced economies of scale and spend to reduce supply costs;

o  Utilising vertical integration capabilities to deliver insourcing
initiatives; and

o  Achieving global freight and logistical savings through increased scale,
utilisation and benefits from third-party logistics suppliers.

·          Operations - approximately 20 per cent. across the
following sources:

o  Increasing operating efficiencies through the implementation of a
best-of-best operating system; and

o  Optimising the combined global manufacturing footprint.

·          The AAM Directors expect that approximately 60 per cent.
of the annual run rate cost synergies will be realised by the end of the
second year following Completion, and the full run rate cost savings are
expected to be substantially achieved by the end of the third year following
Completion.

·          The AAM Directors expect that the one-off costs required
to deliver on the synergy plan are approximately equal to one year of full run
rate savings.

·          In addition, the AAM Directors expect an increase in
operating working capital of approximately $13 million required to deliver
identified run rate freight and logistics synergies.

·          The synergy savings stated are net of anticipated
dis-synergies (expected to be approximately $22 million).

·          The expected synergies will accrue as a direct result of
the Combination and would not be achieved on a standalone basis.

Information on AAM

·          As a leading global tier 1 automotive and mobility
supplier, AAM designs, engineers and manufactures driveline and metal forming
technologies to support electric, hybrid and internal combustion vehicles.
AAM's mission is to deliver efficient, powerful and innovative solutions for
its customers.

·          Headquartered in Detroit, Michigan, AAM has over 75
facilities in 16 countries across North America, Latin America, Europe and
Asia. AAM employs approximately 21,000 employees globally. AAM is a Delaware
corporation and AAM Shares are publicly traded on the New York Stock Exchange
(NYSE:AXL).

·          AAM has established a high-efficiency product portfolio
that is designed to improve axle efficiency and fuel economy through
innovative product design technologies. Its portfolio includes high-efficiency
axles, aluminium axles and all-wheel-drive applications. AAM's metal forming
segment represents the largest automotive forging operation in the world, and
provides engine, transmission, driveline and safety-critical components for
light, commercial and industrial vehicles. Net sales for 2023 were
approximately $6.08 billion.

Information on Dowlais

·          Dowlais is a specialist engineering group focused on the
automotive sector. Dowlais develops and delivers precisely engineered
solutions that are shaping the future of the automotive industry through its
two leading high-technology engineering businesses: GKN Automotive and GKN
Powder Metallurgy.

·          GKN Automotive: a global leader in the development and
production of sideshafts, propshafts, AWD systems and advanced differentials
and a trusted partner to over 90 per cent. of global automotive OEMs. Its
products drive the wheels of around half the world's light vehicles, and it
has been a pioneer in the development of eDrive systems, remaining at the
forefront of electric vehicle powertrain technology.

·          GKN Powder Metallurgy: a global leader in the production
of sintered metal products for the automotive and industrial sectors and a
leading manufacturer of atomised metal powders. Its world-class engineering
expertise and sustainable technology enables the design and production of
parts with complex geometries, higher densities and improved physical
properties.

·          Dowlais is headquartered in the United Kingdom, and
operates across the Americas, Europe and Asia with over 70 manufacturing
facilities and seven global innovation centres. Dowlais employs approximately
30,000 employees globally, including its joint ventures. Dowlais Shares are
publicly traded on the London Stock Exchange (LSE: DWL).

Irrevocable undertakings

·          AAM has received irrevocable undertakings to vote in
favour (or procure a vote in favour) of the Scheme at the Court Meeting and
the Resolutions to be proposed at the General Meeting from those Dowlais
Directors who hold Dowlais Shares in respect of their own beneficial
shareholdings, totalling 3,864,429 Dowlais Shares representing approximately
0.3 per cent. of the issued ordinary share capital of Dowlais as at 28 January
2025, being the last Business Day before the date of this Announcement.

·          Further details of these irrevocable undertakings are set
out in Appendix 3 to this Announcement.

Background to and reasons for the recommendation

·          Dowlais is a specialist engineering group focused on the
automotive sector. Since its listing in April 2023, Dowlais has made strong
progress on its strategy to accelerate its transition to a power-agnostic
business model and has continued to deliver operational and performance
improvements despite a challenging market environment.

·          The Dowlais Directors remain fully confident that Dowlais
will continue to execute successfully on its strategic priorities, leaving it
better positioned to navigate market volatility and deliver sustainable,
profitable growth and cash generation.

·          While the Dowlais Directors did not solicit an offer for
Dowlais, the Dowlais Directors remain focused on maximising the full value of
Dowlais for the benefit of its shareholders by considering all available
options. In assessing the Combination, the Dowlais Directors have focused on
both the near-term and long-term value that the Combination is expected to
deliver to Dowlais Shareholders as well as the implications for Dowlais'
stakeholders.

·          The Dowlais Directors believe that the Combination
represents an attractive opportunity to accelerate the realisation of
shareholder value through the establishment of a global, automotive supplier
with market-leading capabilities, better-positioned together to navigate both
the short-term challenges and long-term market dynamics in the automotive
sector.

·          In considering the terms of the Combination and
determining whether they reflected an appropriate valuation of Dowlais and its
future prospects, the Dowlais Directors have taken into account a number of
factors, including the premium and consideration mix, and offering Dowlais
Shareholders the opportunity to participate in the anticipated value creation
from the substantial synergies expected to be delivered through the
Combination and accrue to the shareholders of the Combined Group.

Recommendation

·          The Dowlais Directors, who have been so advised by
Barclays and Rothschild & Co as to the financial terms of the Combination,
consider the terms of the Combination to be fair and reasonable. In providing
their advice to the Dowlais Directors, Barclays and Rothschild & Co have
taken into account the commercial assessments of the Dowlais Directors.
Barclays and Rothschild & Co are providing independent financial advice to
the Dowlais Directors for the purposes of Rule 3 of the Code.

·          Accordingly, the Dowlais Directors intend to recommend
unanimously that Scheme Shareholders vote in favour of the Scheme at the Court
Meeting and Dowlais Shareholders vote in favour of the Resolutions to be
proposed at the General Meeting (or in the event that the Combination is
implemented by way of a Takeover Offer, that Dowlais Shareholders accept or
procure acceptance of such Takeover Offer) as the Dowlais Directors who hold
Dowlais Shares have irrevocably undertaken to do in respect of their entire
beneficial holdings of 3,864,429 Dowlais Shares, in aggregate, representing
approximately 0.3 per cent. of the issued ordinary share capital of Dowlais as
at 28 January 2025 (being the last Business Day before the date of this
Announcement). Further details of these irrevocable undertakings are set out
at Appendix 3 to this Announcement.

·          AAM and Dowlais have agreed certain arrangements whereby
the consideration per Dowlais Share will be increased should certain shares in
Dowlais be cancelled for nil consideration prior to the Effective Date as set
out in paragraph 21 (Melrose ESOT), whilst maintaining the total consideration
payable by AAM pursuant to the Combination. For the avoidance of doubt, as
described in paragraph 21 (Melrose ESOT), there can be no certainty that
certain shares in Dowlais will be cancelled for nil consideration prior to the
Effective Date with a resulting increase to the consideration per Dowlais
Share under the terms of the Combination as set out in paragraph 21 (Melrose
ESOT), and the Dowlais Directors' intention to recommend as set out above is
based solely on the terms of the Combination as at the date of this
Announcement, and the financial advice received by the Dowlais Directors has
been given on that basis.

·          The AAM Directors have unanimously approved the
Combination and intend to recommend that AAM Shareholders vote in favour of
the amendment to AAM's certificate of incorporation to increase the number of
authorised AAM Shares and the issuance of the New AAM Shares in connection
with the Combination. J.P. Morgan has acted as financial adviser to AAM in
relation to the Combination.

Timetable and Conditions

·          The Combination is subject to, among other things: (i)
approval of the requisite majority of the Scheme Shareholders at the Court
Meeting and the Dowlais Shareholders at the General Meeting; (ii) the sanction
of the Scheme by the Court; (iii) the receipt of certain antitrust and other
regulatory approvals; (iv) the amendment to AAM's certificate of incorporation
to increase the number of authorised AAM Shares duly approved by the
affirmative vote of the holders of a majority in voting power of the AAM
Shares entitled to vote thereon at the AAM Shareholder Meeting; (v) the
issuance of the New AAM Shares in connection with the Combination being duly
approved by the affirmative vote of the holders of a majority in voting power
present in person or by proxy at the AAM Shareholder Meeting; and (vi)
confirmation having been received by AAM that the New AAM Shares have been
approved for listing, subject to official notice of issuance, on the New York
Stock Exchange. The Combination is also subject to the other terms and
Conditions set out in Appendix 1 to this Announcement, and to the full terms
and conditions to be set out in the Scheme Document, including the EU
Antitrust Condition, the U.S. Antitrust Condition, the China Antitrust
Condition, the Brazil Antitrust Condition and the Mexico Antitrust Condition.

·          The Combination will be put to Scheme Shareholders at the
Court Meeting and the Dowlais Shareholders at the General Meeting. In order to
become Effective, the Scheme must be approved by a majority in number of the
Scheme Shareholders at the Court Meeting, present and voting, either in person
or by proxy, representing at least 75 per cent. in value of the Scheme Shares
voted. In addition, a special resolution implementing the Scheme must be
passed by Dowlais Shareholders representing at least 75 per cent. of votes
cast at the General Meeting (expected to be held immediately after the Court
Meeting). Following the Court Meeting, the Scheme must also be sanctioned by
the Court. Finally, a copy of the Court Order must be delivered to the
Registrar of Companies, upon which the Scheme will become Effective. The
Scheme must become Effective by no later than the Long Stop Date.

·          The Scheme Document will include full details of the
Scheme (including the expected timetable for the Combination and how Dowlais
Shareholders can hold, access and trade their interests in New AAM Shares),
together with notices of the Court Meeting and the General Meeting, the Forms
of Proxy, the Forms of Election in relation to the Mix and Match Facility and
the expected timetable for the Combination, and will specify the actions to be
taken by Dowlais Shareholders. The Scheme Document will be posted to Dowlais
Shareholders in May or June 2025. The extended period until publication of
such documentation in relation to the Combination has been agreed with the
Panel and Dowlais and is to allow the Scheme Document to be published at or
around the same time as the mailing of the AAM Proxy Statement following
publication of the annual results of both AAM and Dowlais for the year ended
31 December 2024 and allowing for any SEC review period of the AAM Proxy
Statement (if required).

·          Shareholders' attention is drawn to the section entitled
"High-Level U.S. Federal Income Tax Consequences" in this Announcement. The
Scheme Document will contain details on the potential application of section
304 of the U.S. Internal Revenue Code (IRC), and the potential resulting U.S.
withholding tax at a rate of up to 30 per cent. to the cash consideration
received pursuant to the Combination, and will provide information for Dowlais
Shareholders on how to certify whether or not it meets the requirements for
exemption from U.S. Deemed Dividend Tax (and therefore potentially not be
subject to such withholding tax), as described further below in the section
entitled "High-Level U.S. Federal Income Tax Consequences".

·          The Combination is expected to complete during 2025,
subject to the satisfaction (or, where permitted, waiver) of the Conditions
set out in Appendix 1 to this Announcement, including the EU Antitrust
Condition, the U.S. Antitrust Condition, the China Antitrust Condition, the
Brazil Antitrust Condition and the Mexico Antitrust Condition.

·          Commenting on the Combination, David C. Dauch, Chairman
and Chief Executive Officer of AAM, said:

"This announcement marks another key milestone in our continued long-term
strategic growth plan. We are excited to bring together these two outstanding
companies to create a leading driveline and metal-forming supplier serving the
global automotive industry as it continues to evolve. The combination will
create significant immediate and long-term shareholder value while helping to
power a more sustainable future. Together with Dowlais, we will have the
powertrain-agnostic product portfolio, global reach, commitment to innovation
and financial strength to meet the needs of customers and succeed in a dynamic
market environment."

·          Commenting on the Combination, Simon Mackenzie Smith,
Chair of Dowlais, said:

"The Dowlais board is unanimous in its view that the proposed combination with
AAM offers a compelling opportunity to unlock value for our shareholders. The
strategic rationale for the combination is clear: together, we create a global
leader with enhanced financial strength, broader diversification and a
market-leading product portfolio that spans traditional and electrified
powertrain solutions. Importantly, our shareholders will benefit not only from
an immediate premium but also from the significant synergies that this
combination will deliver. Whilst the Dowlais board remain confident in our
stand-alone strategy, this transaction creates significant shareholder value
while ensuring that our outstanding businesses continue to shape the future of
mobility."

·    Commenting on the Combination, Liam Butterworth, Chief Executive
Officer of Dowlais, said:

"Today's announcement marks a significant opportunity to build on the success
of Dowlais Group. The combination of the two companies accelerates the
execution of our strategy by leveraging our combined scale, resources,
capabilities, and outstanding management teams. Our product portfolios and
technological expertise are highly complementary, positioning us to better
serve our customers and exceed their expectations. This transaction also
combines our respective strengths in innovation, technology, and talent,
creating a solid foundation for delivering long-term value to our
shareholders. Our shared vision is to be a leading supplier of power-agnostic
products as the world transitions to electrified mobility while maintaining
operational excellence and driving sustainable growth, improved margins, and
stronger cash flow generation. Together, we will unlock significant synergies,
accelerate innovation, and position the combined group for long-term success
in a dynamic industry. I am incredibly proud of what our team has achieved and
excited about the opportunities that lie ahead for the combined group."

This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and its Appendices.

The conditions to, and certain further terms of, the Combination are set out
in Appendix 1 to this Announcement. The bases and sources for certain
financial information contained in this Announcement are set out in Appendix
2. Details of irrevocable undertakings received by AAM are set out in Appendix
3. Appendix 4 contains details and bases of belief of the AAM FY24 Profit
Estimate. Appendix 5 contains details and bases of belief of the Dowlais FY24
Profit Estimate. Appendix 6 contains details and bases of belief of the
anticipated quantified financial benefits of the Combination together with the
related reports from AAM's reporting accountant, Deloitte, and AAM's financial
adviser, J.P. Morgan Cazenove as required under Rule 28.1(a) of the Code, and
provides underlying information and bases for the reporting accountant's and
advisers' respective reports. Each of Deloitte and J.P. Morgan has given and
not withdrawn its consent to the publication of its report in this
Announcement in the form and context in which it is included. The defined
terms used in this Announcement are set out in Appendix 7.

For the purposes of Rule 28 of the Code, the Quantified Financial Benefits
Statement contained in this Announcement is the responsibility of AAM and the
AAM Directors.

AAM will hold a conference call for analysts and investors at 8.00 a.m. (ET)
on Wednesday, January 29, 2025 with a dial-in facility available on
1-877-883-0383 (toll free) or 1-412-902-6506 (international). The access code
is 1760312.

 

 

 

Enquiries

 AAM

 Christopher M. Son, Vice President, Marketing & Communications      +1 (313) 758-4814

 J.P. Morgan (Exclusive financial adviser to AAM)

 David Walker / Ian MacAllister                                      +1 (212) 270 6000
 Robert Constant / Jonty Edwards                                     +44 (0) 203 493 8000

 FGS Global (PR adviser to AAM)

 Jared Levy / Jim Barron                                             +1 212 687 8080
 Charlie Chichester / Rory King                                      +44 20 7251 3801

 Dowlais

 Investors
 Pier Falcione                                                       +44 (0) 7974 974690

 Barclays (Financial adviser and corporate broker to Dowlais)

Guy Bomford / Adrian Beidas / Neal West (Corporate Broking)  +44 (0) 20 7623 2323

 

 Rothschild & Co (Financial adviser to Dowlais)

 Ravi Gupta / Nathalie Ferretti                                      +44 (0) 20 7280 5000

 Investec Bank plc (Joint corporate broker to Dowlais)

Carlton Nelson / Christopher Baird  +44 (0) 20 7597 5970

 

 Montfort Communications (PR adviser to Dowlais)

 Nick Miles / Neil Craven                                            +44 (0) 7739 701 634

                                                                     +44 (0) 7876 475 419

 

Rothschild & Co (Financial adviser to Dowlais)

Ravi Gupta / Nathalie Ferretti

+44 (0) 20 7280 5000

 

Investec Bank plc (Joint corporate broker to Dowlais)

 

 Carlton Nelson / Christopher Baird  +44 (0) 20 7597 5970

 

Montfort Communications (PR adviser to Dowlais)

Nick Miles / Neil Craven

+44 (0) 7739 701 634

+44 (0) 7876 475 419

 

Allen Overy Shearman Sterling LLP is acting as legal adviser to AAM. Slaughter
and May is acting as legal adviser to Dowlais. Cravath, Swaine & Moore LLP
is acting as U.S. legal adviser to Dowlais.

The person responsible for arranging the release of this Announcement on
behalf of Dowlais is John Nicholson, General Counsel & Company Secretary.

Important notices relating to financial advisers

J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Securities
plc (which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority and regulated in the United Kingdom by the Prudential Regulation
Authority and the Financial Conduct Authority). J.P. Morgan is acting as
financial adviser exclusively for AAM and no one else in connection with the
Combination and will not regard any other person as its client in relation to
the Combination and will not be responsible to anyone other than AAM for
providing the protections afforded to clients of J.P. Morgan or its
affiliates, nor for providing advice in relation to the Combination or any
other matter or arrangement referred to herein.

Barclays, which is authorised by the Prudential Regulation Authority and
regulated in the United Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively for Dowlais and no one
else in connection with the Combination and will not be responsible to anyone
other than Dowlais for providing the protections afforded to clients of
Barclays nor for providing advice in relation to the Combination or any other
matter referred to in this Announcement.

In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays and its affiliates will continue to act
as exempt principal trader in Dowlais securities on the London Stock Exchange.
These purchases and activities by exempt principal traders which are required
to be made public in the United Kingdom pursuant to the Code will be reported
to a Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com
(http://www.londonstockexchange.com) . This information will also be publicly
disclosed in the United States to the extent that such information is made
public in the United Kingdom.

Rothschild & Co, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively as financial adviser to
Dowlais and for no‑one else in connection with the Combination and shall not
be responsible to anyone other than Dowlais for providing the protections
afforded to clients of Rothschild & Co, nor for providing advice in
connection with the Combination or any matter referred to herein. Neither
Rothschild & Co nor any of its affiliates (nor their respective directors,
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Rothschild & Co in connection with this Announcement, any statement
contained herein, the Combination or otherwise. No representation or warranty,
express or implied, is made by Rothschild & Co as to the contents of this
Announcement.

Investec, which is authorised in the United Kingdom by the PRA and regulated
in the United Kingdom by the FCA and the PRA, is acting exclusively for
Dowlais and no one else in connection with the subject matter of this
Announcement and will not regard any other person as its client in relation to
the subject matter of this Announcement and will not be responsible to anyone
other than Dowlais for providing the protections afforded to the clients of
Investec, or for providing advice in connection with the subject matter of
this Announcement or any other matters referred to herein. Neither Investec
nor any of its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Investec in connection with the subject matter of this Announcement,
any statement contained herein or otherwise, and no representation, express or
implied, is made by Investec or any of its subsidiaries, branches or
affiliates, or purported to be made on behalf of Investec or any of its
subsidiaries, branches or affiliates, in relation to the contents of this
Announcement, including with regard to the accuracy or completeness of the
Announcement or the verification of any other statements made or purported to
be made by or on behalf of Investec or any of its subsidiaries, branches or
affiliates in connection with the matters described in this Announcement.

Further information

This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval in any jurisdiction pursuant to
the Combination or otherwise. In particular, this Announcement is not an offer
of securities for sale into the U.S. No offer of securities shall be made in
the U.S. absent registration under the U.S. Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, such registration
requirements. The Combination will be made solely through the Scheme Document
(or, if the Combination is implemented by way of a Takeover Offer, the
Takeover Offer documents), which, together with the accompanying Forms of
Proxy and Forms of Election in relation to the Mix and Match Facility, which
will contain the full terms and conditions of the Combination, including
details of how to vote in respect of the Combination. Any decision in respect
of the Combination should be made only on the basis of the information in the
Scheme Document (or, if the Combination is implemented by way of a Takeover
Offer, the Takeover Offer documents).

Dowlais will prepare the Scheme Document to be distributed to Dowlais
Shareholders. Dowlais and AAM urge Dowlais Shareholders to read the Scheme
Document (or any other document by which the Combination is made) in full when
it becomes available because it will contain important information relating to
the Combination, including details of how to vote in respect of the Scheme.

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.

This Announcement does not constitute a prospectus or a prospectus equivalent
document.

This Announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England.

The Combination will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange and the FCA.

Neither the SEC nor any U.S. state securities commission has approved,
disproved or passed judgment upon the fairness or the merits of the
Combination or determined if this Announcement is adequate, accurate or
complete. Any representation to the contrary is a criminal offence in the U.S.

Overseas Shareholders

The release, publication or distribution of this Announcement in jurisdictions
other than the UK, and the availability of the Combination to Dowlais
Shareholders who are not resident in the UK, may be restricted by law and
therefore any persons who are not resident in the UK or who are subject to the
laws of any jurisdiction other than the UK (including Restricted
Jurisdictions) should inform themselves about, and observe, any applicable
legal or regulatory requirements. In particular, the ability of persons who
are not resident in the UK or who are subject to the laws of another
jurisdiction to participate in the Combination or to vote their Dowlais Shares
in respect of the Scheme at the Court Meeting, or to execute and deliver Forms
of Proxy appointing another to vote at the Court Meeting on their behalf, may
be affected by the laws of the relevant jurisdictions in which they are
located or to which they are subject. Any failure to comply with applicable
legal or regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in the
Combination disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by AAM or required by the Code, and permitted by
applicable law and regulation, the Combination shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Combination by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.

Accordingly, copies of this Announcement and any formal documentation relating
to the Combination are not being, and must not be, directly or indirectly,
mailed or otherwise forwarded, distributed or sent in or into or from any
Restricted Jurisdiction or any jurisdiction where to do so would constitute a
violation of the laws of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Combination.

Further details in relation to Dowlais Shareholders in overseas jurisdictions
will be contained in the Scheme Document (or, if the Combination is
implemented by way of a Takeover Offer, the Takeover Offer documents).

Additional information for U.S. investors in Dowlais

The Combination relates to an offer for the shares of an English company and
is proposed to be implemented by means of a scheme of arrangement provided for
under English company law. The Combination, implemented by way of a scheme of
arrangement, is not subject to the tender offer rules or the related proxy
solicitation rules under the U.S. Exchange Act. Accordingly, the Combination
is subject to the disclosure requirements and practices applicable to a scheme
of arrangement involving a target company in the UK listed on the London Stock
Exchange, which differ from the disclosure requirements of the U.S. tender
offer and related proxy solicitation rules. If, in the future, AAM exercises
its right to elect to implement the Combination by way of a Takeover Offer and
determines to extend the Takeover Offer into the U.S., such Takeover Offer
will be made in compliance with applicable U.S. laws and regulations.

The New AAM Shares to be issued pursuant to the Combination have not been and
will not be registered under the U.S. Securities Act, and may not be offered
or sold by AAM in the U.S. absent registration or an applicable exemption from
the registration requirements of the U.S. Securities Act. The New AAM Shares
to be issued pursuant to the Combination will be issued pursuant to the
exemption from registration set forth in Section 3(a)(10) of the U.S.
Securities Act. If, in the future, AAM exercises its right to elect to
implement the Combination by way of a Takeover Offer or otherwise determines
to conduct the Combination in a manner that is not exempt from the
registration requirements of the U.S. Securities Act, it will file a
registration statement with the SEC that will contain a prospectus with
respect to the issuance of New AAM Shares. In this event, Dowlais Shareholders
are urged to read these documents and any other relevant documents filed with
the SEC, as well as any amendments or supplements to all such documents,
because they will contain important information, and such documents will be
available free of charge at the SEC's website at www.sec.gov
(http://www.sec.gov) or by directing a request to AAM's contact for enquiries
identified above.

This Announcement contains, and the Scheme Document will contain certain
unaudited financial information relating to Dowlais that has been prepared in
accordance with UK-endorsed International Financial Reporting Standards
("IFRS") and thus may not be comparable to financial information of U.S.
companies or companies whose financial statements are prepared in accordance
with U.S. generally accepted accounting principles. U.S. generally accepted
accounting principles differ in certain significant respects from IFRS.

Dowlais is incorporated under the laws of a non-U.S. jurisdiction, some or all
of Dowlais' officers and directors reside outside the U.S., and some or all of
Dowlais' assets are or may be located in jurisdictions outside the U.S.
Therefore, U.S. Dowlais Shareholders (defined as Dowlais Shareholders who are
U.S. persons as defined in the U.S. Internal Revenue Code or "IRC") may have
difficulty effecting service of process within the U.S. upon those persons or
recovering against Dowlais or its officers or directors on judgments of U.S.
courts, including judgments based upon the civil liability provisions of the
U.S. federal securities laws. Further, it may be difficult to compel a
non-U.S. company and its affiliates to subject themselves to a U.S. court's
judgment. It may not be possible to sue Dowlais or its officers or directors
in a non-U.S. court for violations of the U.S. securities laws.

In accordance with normal United Kingdom practice, AAM or its nominees, or its
brokers (acting as agents), may from time to time make certain purchases of,
or arrangements to purchase, shares or other securities of Dowlais outside of
the U.S., other than pursuant to the Combination, until the date on which the
Combination and/or Scheme becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any such purchases by AAM will not
be made at prices higher than the price of the Combination provided in this
Announcement unless the price of the Combination is increased accordingly. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com.

High-Level U.S. Federal Income Tax Consequences

The receipt of New AAM Shares and cash by Dowlais Shareholders as
consideration for the transfer of Dowlais Shares pursuant to the Combination
may be a taxable transaction for U.S. federal income tax purposes and under
applicable U.S. state and local, as well as foreign and other, tax laws. Such
consequences, if any, are not generally described herein.

For certain Dowlais Shareholders, Section 304 of the IRC may apply to the
Combination if the Dowlais Shareholders, in the aggregate, own stock of AAM
possessing 50 per cent. or more of the total combined voting power or 50 per
cent. or more of the total combined value of all classes of stock of AAM
immediately following Completion, taking into account certain constructive
ownership rules under the IRC and, in the case of a Dowlais Shareholder who
also owns AAM common stock, taking into account any New AAM Shares received by
such Dowlais Shareholder as a result of the Combination. If Section 304 of the
IRC were to apply to the Combination, the cash consideration received pursuant
to the Combination may be subject to U.S. federal income tax as a deemed
dividend ("U.S. Deemed Dividend Tax"). A Dowlais Shareholder should only be
subject to U.S. Deemed Dividend Tax if the Dowlais Shareholder receives cash
under the Combination and also owns AAM Shares. Further, even if a Dowlais
Shareholder also owns AAM Shares, it should only be subject to U.S. Deemed
Dividend Tax if the Dowlais Shareholder owns (i) an equivalent or greater
percentage of AAM Shares than Dowlais Shares at Completion, and (ii) its
indirect ownership interest in Dowlais is not therefore reduced as a result of
the Combination, taking into account certain constructive ownership rules and
the AAM Shares received as consideration in the Combination.

For U.S. Dowlais Shareholders, dividends are generally taxable as ordinary
income, subject to any reduced tax rates or deductions provided under the IRC.
U.S. Dowlais Shareholders who do not actually or constructively own any AAM
Shares immediately prior to the Combination will recognise a capital gain or
loss equal to the difference between the amount of cash received and such U.S.
holder's tax basis in the portion of its Dowlais Shares that is exchanged for
such cash.

For Non-U.S. Dowlais Shareholders, U.S. Deemed Dividend Tax will be collected
via a withholding tax at a 30 per cent. rate (or such lower rate as may be
specified by an applicable income tax treaty) from the cash consideration
received pursuant to the Combination. To establish whether such withholding is
required from the cash consideration paid to each Non-U.S. Dowlais
Shareholder, each Non-U.S. Dowlais Shareholder must, if necessary, complete a
certificate, in the form to be provided in circumstances where it is
necessary, certifying whether or not it meets the requirements for exemption
from U.S. Deemed Dividend Tax. The certification process is not standardised,
and depends upon information properly flowing through the brokerage network.
To the extent relevant, you should consult your retail broker as to the
procedures they employ; it is possible that some brokers may be unfamiliar
with this process.

Failure by a Non-U.S. Dowlais Shareholder to complete and return such
certificate may result in withholding tax at a rate of 30 per cent. (or such
lower rate as may be specified by an applicable income tax treaty) on the full
amount of the cash payable to such Non-U.S. Dowlais Shareholder.

If excess amounts are withheld from the cash consideration payable to a
Non-U.S. Dowlais Shareholder, the Non-U.S. Dowlais Shareholder may obtain a
refund of any such excess amounts by timely filing an appropriate claim with
the IRS.

Dowlais Shareholders that may be concerned about the application of Section
304 of the IRC and the potential treatment of the cash consideration as a
deemed dividend for U.S. federal income tax purposes should take this into
account when determining whether to make an election under the Mix and Match
Facility to receive different proportions of cash and New AAM Shares in
respect of their holdings in Dowlais Shares, which would impact the amount of
Dowlais Shares attributed to them after the Combination.

The receipt of consideration in exchange for Dowlais Shares pursuant to the
Combination may also be subject, under certain circumstances, to FATCA or
other backup withholding with respect to a Dowlais Shareholder that does not
satisfy certain rules with respect to its identity under U.S. or other tax
laws applicable to such Dowlais Shareholder.

Each Dowlais Shareholder is urged to consult with legal, tax and financial
advisers in connection with making a decision regarding the Combination,
including in light of the potential application of Section 304 of the IRC to
the Combination.

Forward-looking statements

This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Combination, and other
information published by AAM and Dowlais contain statements which are, or may
be deemed to be, "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are prospective in nature and are not based on historical facts, but rather on
assumptions, expectations, valuations, targets, estimates, forecasts and
projections of AAM and Dowlais about future events, and are therefore subject
to risks and uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the
forward-looking statements. The forward-looking statements contained in this
Announcement include statements relating to the expected effects of the
Combination on the AAM Group, the Dowlais Group and the Combined Group, such
as the statements about the expected profitable growth, value-enhancing
investments, sustainable capital returns and other characteristics of the
Combined Group, the expected timing and scope of the Combination and other
statements other than historical facts. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words such as
"plans", "expects", "budgets", "targets", "aims", "scheduled", "estimates",
"forecast", "intends", "anticipates", "seeks", "prospects", "potential",
"possible", "assume" or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. AAM and Dowlais
give no assurance that such expectations will prove to be correct. By their
nature, forward-looking statements involve risks (known and unknown) and
uncertainties (and other factors that are in many cases beyond the control of
AAM and/or Dowlais) because they relate to events and depend on circumstances
that may or may not occur in the future.

There are a number of factors that could affect the future operations of the
AAM Group, the Dowlais Group and/or the Combined Group and that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include the
satisfaction (or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and economic
conditions; the impact of pandemics, asset prices; market‑related risks such
as fluctuations in interest rates and exchange rates, industry trends,
competition, changes in government and regulation, changes in the policies and
actions of governments and/or regulatory authorities (including changes
related to capital and tax), changes in political and economic stability
(including exposures to terrorist activities, the UK's exit from the European
Union, Eurozone instability, disruption in business operations due to
reorganisation activities, interest rate, inflation, deflation and currency
fluctuations), the timing impact and other uncertainties of future or planned
acquisitions or disposals or offers, the inability of the Combined Group to
realise successfully any anticipated synergy benefits when the Combination is
implemented (including changes to the board and/or employee composition of the
Combined Group), the inability of the AAM Group to integrate successfully the
Dowlais Group's operations and programmes when the Combination is implemented,
the Combined Group incurring and/or experiencing unanticipated costs and/or
delays (including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Combination when the Combination
is implemented. Other unknown or unpredictable factors could affect future
operations and/or cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should therefore
be construed in the light of such factors. It is not possible to foresee or
identify all such factors.

Each forward-looking statement speaks only as of the date of this
Announcement. Neither the AAM Group nor the Dowlais Group, nor any of their
respective associates or directors, officers or advisers, provides any
representation, warranty, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent
risks and uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers are cautioned not
to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including, without
limitation, under the Code, the UK Market Abuse Regulation, the DTRs and
applicable U.S. securities laws), neither the AAM Group nor the Dowlais Group
is under or undertakes any obligation, and each of the foregoing expressly
disclaims any intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

For a discussion of important risk factors that could cause AAM's actual
results to differ materially from the expectations in the forward-looking
statements, see Part I, Item 1A. under the heading "Risk Factors" in its Form
10-K for the fiscal year ended December 31, 2023 and Part II, Item 1A under
the heading "Risk Factors" in quarterly reports on Form 10-Q for the quarterly
periods ended March 31, 2024, June 30, 2024 and September 30, 2024 filed with
the SEC which also contain additional information regarding forward-looking
statements with respect to AAM.

Solicitation

This Announcement may be deemed to be solicitation material in respect of the
Combination, including the issuance of the New AAM Shares in respect of the
Combination. In connection with the foregoing proposed issuance of the New AAM
Shares, AAM expects to file the AAM Proxy Statement. To the extent the
Combination is effected as a scheme of arrangement under English law, the
issuance of the New AAM Shares in connection with the Combination would not be
expected to require registration under the U.S. Securities Act, pursuant to an
exemption provided by Section 3(a)(10) under the U.S. Securities Act. In the
event that AAM exercises its right to elect to implement the Combination by
way of a Takeover Offer or otherwise determines to conduct the Combination in
a manner that is not exempt from the registration requirements of the U.S.
Securities Act, AAM expects to file a registration statement with the SEC
containing a prospectus with respect to the New AAM Shares that would be
issued in the Combination. Investors and shareholders are urged to read the
AAM Proxy Statement, the Scheme Document, and other relevant documents filed
or to be filed with the SEC or incorporated by reference in the AAM Proxy
Statement (if any) carefully when they become available because they will
contain important information about AAM, the Combination and related matters.
Investors and shareholders will be able to obtain free copies of the AAM Proxy
Statement, the Scheme Document, and other documents filed by AAM with the SEC
at the SEC's website at www.sec.gov (http://www.sec.gov) . In addition,
investors and shareholders will be able to obtain free copies of the AAM Proxy
Statement, the Scheme Document, and other documents filed by AAM with the SEC
at www.aam.com/investors (http://www.aam.com/investors) .

Participants in the Solicitation

AAM and its directors, executive officers and certain other members of
management and employees will be participants in the solicitation of proxies
from AAM's Shareholders in respect of the Combination, including the proposed
issuance of New AAM Shares. Information regarding AAM's directors and
executive officers is contained in the Annual Report on Form 10-K for the
fiscal year ended 31 December 2023 of AAM, which was filed with the SEC on 16
February 2024, the definitive proxy statement on Schedule 14A for the 2024
annual meeting of stockholders of AAM, which was filed with the SEC on 21
March 2024 and the Current Report on Form 8-K of AAM, which was filed with the
SEC on May 2, 2024. Additional information regarding the identity of
participants, and their direct or indirect interests, by security holdings or
otherwise, will be set forth in the AAM Proxy Statement relating to the
Combination when it is filed with the SEC. To the extent holdings of AAM's
securities by its directors or executive officers change from the amounts set
forth in the AAM Proxy Statement, such changes will be reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of Change in
Ownership on Form 4 filed with the SEC. These documents may be obtained free
of charge from the SEC's website at www.sec.gov (http://www.sec.gov) and AAM's
website at www.aam.com/investors (https://www.aam.com/investors) .

No profit forecasts or estimates

The AAM FY24 Profit Estimate is a profit estimate for the purposes of Rule 28
of the Code. The AAM FY24 Profit Estimate, and the assumptions and basis of
preparation on which the AAM FY24 Profit Estimate is based and the AAM
Directors' confirmation, as required by Rule 28.1 of the Code, are set out in
Appendix 4 of this Announcement.

The Dowlais FY24 Profit Estimate is a profit estimate for the purposes of Rule
28 of the Code. The Dowlais FY24 Profit Estimate, and the assumptions and
basis of preparation on which the Dowlais FY24 Profit Estimate is based and
the Dowlais Directors' confirmation, as required by Rule 28.1 of the Code, are
set out in Appendix 5 of this Announcement.

Other than the AAM FY24 Profit Estimate and the Dowlais FY24 Profit Estimate,
nothing in this Announcement (including any statement of estimated cost
savings or synergies) is intended, or is to be construed, as a profit forecast
or profit estimate for any period or to be interpreted to mean that earnings
or earnings per share for AAM or Dowlais for the current or future financial
years, will necessarily match or exceed the historical published earnings or
earnings per share for AAM or Dowlais, as appropriate.

Quantified Financial Benefits Statement

Statements of estimated costs savings and synergies relate to future actions
and circumstances which, by their nature, involve risks, uncertainties and
contingencies. As a result, the costs savings and synergies referred to in the
Quantified Financial Benefits Statement may not be achieved, may be achieved
later or sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified Financial
Benefits Statement, or this Announcement generally, should be construed as a
profit forecast or interpreted to mean that the Combined Group's earnings in
the first full year following the Effective Date, or in any subsequent period,
would necessarily match or be greater than or be less than those of AAM or
Dowlais for the relevant preceding financial period or any other period. For
the purposes of Rule 28 of the Code, the Quantified Financial Benefits
Statement contained in this Announcement is the responsibility of AAM and the
AAM Directors.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 p.m. (London time)on the tenth business day (as defined in
the Code) following the commencement of the offer period and, if appropriate,
by no later than 3.30 p.m. (London time) on the tenth business day (as
defined in the Code) following the Announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a securities exchange offeror
prior to the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 p.m. (London time) on the business day (as defined in the Code)
following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information
provided by Dowlais Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Dowlais may be
provided to AAM during the Offer Period as required under section 4 of
Appendix 4 to the Code to comply with Rule 2.11(c) of the Code.

Publication on a website and availability of hard copies

This Announcement and the documents required to be published pursuant to
Rule 26 of the Code will be available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on AAM's website at
www.aam.com/investors/offer-for-Dowlais-Group-plc
(https://www.aam.com/investors/offer-for-Dowlais-Group-plc) and on Dowlais'
website at www.dowlais.com (http://www.dowlais.com) promptly and in any event
by no later than 12 noon (London time) on the business day (as defined in the
Code) following the date of this Announcement. Neither the content of the
websites referred to in this Announcement nor the content of any website
accessible from hyperlinks in this Announcement is incorporated into, or forms
part of, this Announcement.

Dowlais Shareholders and persons with information rights may, subject to
applicable securities laws, request a hard copy of this Announcement (and any
information incorporated into it by reference to another source), free of
charge, by contacting Dowlais' registrars, Equiniti, by: (i) submitting a
request in writing to Equiniti at Aspect House, Spencer Road, Lancing, West
Sussex BN99 6DA, United Kingdom; or (ii) contacting Equiniti between 8.30 a.m.
and 5.30 p.m. (London time), Monday to Friday (excluding English and Welsh
public holidays), on +44 (0) 371 384 2030 (please use the country code when
calling from outside the UK). A person so entitled may, subject to applicable
securities laws, also request that all future documents, announcements and
information to be sent in relation to the Combination should be in hard copy
form.

Rounding

Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Code, AAM confirms that as at the date of
this Announcement, it has in issue and admitted to trading on the on the New
York Stock Exchange (NYSE:AXL) 117,581,028 shares of common stock of $0.01
each (excluding common stock held in treasury). The International Securities
Identification Number (ISIN) of the common stock is US0240611030.

In accordance with Rule 2.9 of the Code, Dowlais confirms that as at the date
of this Announcement, it has in issue and admitted to trading on the Main
Market of the London Stock Exchange 1,344,524,115 ordinary shares of 1 pence
each (excluding ordinary shares held in treasury). The International
Securities Identification Number (ISIN) of the ordinary shares is
GB00BMWRZ071.

General

If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

29 January 2025

RECOMMENDED CASH AND SHARE COMBINATION

OF

DOWLAIS GROUP PLC ("DOWLAIS")

WITH

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. ("AAM")

1.         Introduction

The boards of AAM and Dowlais are pleased to announce that they have reached
agreement on the terms of a recommended cash and share offer to be made by AAM
for the entire issued and to be issued ordinary share capital of Dowlais (the
"Combination"). It is intended that the Combination will be implemented by way
of a Court-sanctioned scheme of arrangement under Part 26 of the Companies
Act.

2.         The Combination

Under the terms of the Combination, which will be subject to the conditions
set out below and in Appendix 1 to this Announcement and to the full terms and
conditions which will be set out in the Scheme Document, each Dowlais
Shareholder will be entitled to receive:

 for each Dowlais Share held:  0.0863 New AAM Shares;
                               42 pence in cash; and
                               up to 2.8 pence in the form of a final cash dividend to be paid (subject to
                               the approval of the Dowlais Board) prior to Completion

Pursuant to the consideration payable in connection with the Combination, each
Dowlais Shareholder will be entitled to receive the payment of a final cash
dividend by Dowlais of up to 2.8 pence for each Dowlais Share (the "FY24 Final
Dividend") to be paid (subject to the approval of the Dowlais Board) in line
with Dowlais' ordinary course 2024 financial year dividend calendar without
any reduction of the consideration payable under the terms of the Combination.

AAM reserves the right to reduce the consideration payable in respect of each
Dowlais Share under the terms of the Combination to the extent that the FY24
Final Dividend exceeds 2.8 pence per Dowlais Share. If any dividend or other
distribution is announced, declared, made or paid, or becomes payable, in
respect of Dowlais Shares on or after the date of this Announcement and before
the Effective Date, other than the FY24 Final Dividend or any repurchases of
Dowlais Shares by Dowlais pursuant to the Buyback Programme, AAM reserves the
right to reduce the consideration payable in respect of each Dowlais Share by
the amount of all or part of any such dividend or other distribution. If AAM
exercises this right or makes such a reduction in respect of a dividend, other
distribution or return of capital that has not been paid, Dowlais Shareholders
will be entitled to receive and retain that dividend, other distribution or
return of capital. From the date of this Announcement until the Effective
Date, AAM is not permitted to announce, declare, make or pay any dividend,
other distribution or return of capital and, if AAM does not comply with this
restriction, Dowlais shall be entitled (at its sole discretion) to declare and
pay an equalising dividend to Dowlais Shareholders, without any consequential
reduction to the consideration. Further details are set out in paragraph 13
(Dividends).

The terms of the Combination represent a total implied value of 85.2 pence per
Dowlais Share, based on the Closing Price of $5.82 for each AAM Share and
£/US$ exchange rate of 1.2434 on 28 January 2025 (being the close of business
on the last Business Day before the date of this Announcement), the terms of
the Combination (including the FY24 Final Dividend).

Immediately following Completion, it is expected that the Dowlais Shareholders
will own approximately 49 per cent., and AAM Shareholders will own
approximately 51 per cent., of the issued and outstanding capital stock of the
Combined Group, with Dowlais Shareholders benefiting from up-front cash
consideration and the opportunity to participate in the anticipated future
value accretion of the Combined Group.

David C. Dauch will serve as the Chairman and Chief Executive Officer of the
Combined Group. In addition, Roberto Fioroni (Chief Financial Officer,
Dowlais), Helen Redfern (Chief People, Sustainability and Communications
Officer, Dowlais), Markus Bannert (Chief Executive Officer, GKN Automotive),
and Jean-Marc Durbuis (Chief Executive Officer, GKN Powder Metallurgy), will
be invited to join existing AAM executives as part of the senior executive
management team of the Combined Group. It is also expected that Simon
Mackenzie Smith (Chair, Dowlais) and Fiona MacAulay, who currently serve on
the Dowlais Board, will join the Board of AAM following completion of the
Combination.

The terms of the Combination (including the FY24 Final Dividend) value the
entire issued and to be issued ordinary share capital of Dowlais at
approximately £1.16 billion on a fully diluted basis and represent a premium
of approximately:

·        25 per cent. to the Closing Price of 68 pence for each
Dowlais Share as at the close of business on 28 January 2025 (being the last
Business Day before the date of this Announcement);

·        45 per cent. to the volume-weighted average price of 59 pence
for each Dowlais Share for the three-month period ended on 28 January 2025
(being the last Business Day before the date of this Announcement); and

·        46 per cent. to the volume-weighted average price of 59 pence
for each Dowlais Share for the six-month period ended on 28 January 2025
(being the last Business Day before the date of this Announcement).

The terms represent an implied enterprise value multiple of approximately 4.1
times Dowlais' adjusted EBITDA for the 12-month period ended 31 December 2023,
and 3.0 times when including full run rate cost synergies.

A Mix and Match Facility will also be made available to Dowlais Shareholders
in order to enable them to elect, subject to off-setting elections, to vary
the proportions in which they receive cash and New AAM Shares in respect of
their holdings in Dowlais Shares. However, the total number of New AAM Shares
to be issued and the maximum aggregate amount of cash to be paid under the
terms of the Combination will not be varied as a result of elections under the
Mix and Match Facility. Further details in respect of the Mix and Match
Facility are set out in paragraph 5 (Mix and Match Facility) of this
Announcement.

The Combination is expected to be effected by means of a Court-sanctioned
scheme of arrangement between Dowlais and Scheme Shareholders under Part 26 of
the Companies Act, although AAM reserves the right to elect to implement the
Combination by way of a Takeover Offer.

It is expected that the Scheme Document, containing further information about
the Combination (including the expected timetable for the Combination and how
Dowlais Shareholders can hold, access and trade their interests in New AAM
Shares), together with notices of the Court Meeting and General Meeting, the
Forms of Proxy and the Forms of Election in relation to the Mix and Match
Facility will be posted to Dowlais Shareholders in May or June 2025. The
extended period until publication of such documentation in relation to the
Combination has been agreed with the Panel and Dowlais and is to allow the
Scheme Document to be published at or around the same time as the mailing of
the AAM Proxy Statement following publication of the annual results of both
AAM and Dowlais for the year ended 31 December 2024 and allowing for any SEC
review period of the AAM Proxy Statement (if required).

Shareholders' attention is drawn to the section entitled "High-Level U.S.
Federal Income Tax Consequences" in this Announcement. The Scheme Document
will contain details on the potential application of section 304 of the U.S.
Internal Revenue Code (IRC), and the potential resulting U.S. withholding tax
at a rate of up to 30 per cent. to the cash consideration received pursuant to
the Combination, and will provide information for Dowlais Shareholders on how
to certify whether or not it meets the requirements for exemption from U.S.
Deemed Dividend Tax (and therefore potentially not be subject to such
withholding tax), as described further below in the section entitled
"High-Level U.S. Federal Income Tax Consequences".

Subject to the satisfaction or, where permitted, waiver of all relevant
conditions, including the Conditions, and certain further terms set out in
Appendix 1 to this Announcement and to be set out in the Scheme Document, and
subject to the approval and availability of the Court, it is expected that the
Scheme will become Effective in 2025.

The Combination will be subject to the Conditions and certain further terms
set out in Appendix 1 to this Announcement, including, among other things: (i)
the approval of Scheme Shareholders at the Court Meeting and the passing of
the Resolutions relating to the Scheme by Dowlais Shareholders at the General
Meeting; (ii) the sanction of the Scheme by the Court; (iii) the receipt of
certain antitrust and other regulatory approvals; (iv) the Scheme becoming
Effective no later than the Long Stop Date; (v) the amendment to AAM's
certificate of incorporation to increase the number of authorised AAM Shares
and the issuance of the New AAM Shares in connection with the Combination
being duly approved by the affirmative vote of the holders of a majority in
voting power of the AAM Shares entitled to vote thereon at the AAM Shareholder
Meeting; and (vi) confirmation having been received by AAM that the New AAM
Shares have been approved for listing, subject to official notice of issuance,
on the New York Stock Exchange. In order to become Effective, the Scheme must
be approved by a majority in number representing not less than 75 per cent. in
value of the Scheme Shareholders (or the relevant class or classes thereof, if
applicable) in each case present, entitled to vote and voting, either in
person or by proxy, at the Court Meeting and at any separate class meeting
which may be required by the Court or at any adjournment of such meeting.

Dowlais Shares will be acquired by AAM fully paid and free from all liens,
equitable interests, charges, encumbrances, rights of pre-emption and any
other third party rights or interests whatsoever and together with all rights
existing at the date of this Announcement or thereafter attaching thereto,
including (without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid or any other
return of capital (whether by way of reduction of share capital or share
premium account or otherwise) made on or after the date of this Announcement
in respect of Dowlais Shares, other than the FY24 Final Dividend or any
repurchases of Dowlais Shares by Dowlais pursuant to the Buyback Programme.

As a result of the Combination, the Dowlais Directors have taken the decision
to terminate the Buyback Programme previously announced.

AAM and Dowlais have agreed certain arrangements whereby the consideration per
Dowlais Share may be increased should certain shares in Dowlais be cancelled
for nil consideration prior to the Effective Date as set out in paragraph 21
(Melrose ESOT), without increasing the total consideration payable by AAM
pursuant to the Combination.

3.         Background to and reasons for the Combination

AAM and Dowlais are leading global tier-one automotive suppliers specialising
in driveline and metal forming technologies for internal combustion, electric
and hybrid vehicles. The combination of AAM and Dowlais will create a leading
global manufacturer with the scale, product portfolio, technology and global
diversification required to lead and innovate in a transitioning business
environment.

 

The AAM Directors believe that the Combined Group will benefit from a more
diversified business model across both customers and geographies as well as
the significant synergies arising from the combination of AAM and Dowlais.
This model will feature a robust cash-generative financial profile, a strong
balance sheet, and a more competitive and margin enhancing position than the
standalone businesses, enabling continued innovation, growth, and long-term
value creation for shareholders as the industry transitions to alternate
propulsion technologies.

 

The Combination will bring together two companies with highly complementary
customer bases, geographic footprints, powertrain-agnostic product portfolios,
and manufacturing operations. It will benefit from a best-of-best management
team and the significant leadership depth present in both organisations.

 

The Combination offers shareholders the opportunity to participate in future
value creation unlocked through the delivery of these cost synergies.

Key features of the Combined Group:

·    Leading global driveline and metal-forming supplier with significant
size and scale - AAM and Dowlais expect that the Combined Group will benefit
from greater scale and diversification, which brings numerous benefits
including: financial and operational resilience, enabling the business to
adapt to demand fluctuations and macroeconomic events; strengthened
relationships with customers and other industry stakeholders; a competitive
cost base driven by economies of scale; pooled resources for R&D and
investment, including EV transition and new technologies; and increased
agility and flexibility in a dynamic, fast-moving industry.

·    Comprehensive powertrain-agnostic product portfolio with leading
technology - The Combination will create an industry-leading portfolio of
products across a broad range of automotive segments, supporting internal
combustion engine (ICE), hybrid and electric powertrains. The metal forming
and powder metallurgy product groups will provide both vertical integration
capabilities and further diversification beyond the auto industry. The
Combined Group will benefit from enhanced scale to fund investments in future
innovation in its powertrain-agnostic product portfolio.

·    Diversified customer base with expanded and balanced geographic
presence - The Combined Group will be a truly global supplier, serving a wide
range of vehicles with a well-diversified and complementary customer base.
Additionally, the Combined Group will benefit from a more balanced regional
presence. AAM's position in pickup trucks and SUVs and Dowlais' position
across multiple other vehicle segments globally create an attractive business
portfolio. The combined businesses also have strong foundations to serve the
large and growing Chinese vehicle market, in particular with emerging domestic
Chinese OEMs that are positioned for global growth. As a result, the Combined
Group will be well-positioned to support and profitably participate in the
transition to alternate propulsion technologies in all regions.

·    Compelling industrial logic with ~$300 million of synergies - The
complementary nature of AAM's and Dowlais' businesses will enable the creation
of significant, annual run rate cost synergies of approximately $300 million,
expected to be substantially achieved by the end of the third year after
Completion. The AAM management team has a proven acquisition track record,
having successfully integrated and delivered significant cost synergy value
through the acquisitions of Metaldyne Performance Group and Tekfor Group.
Additionally, the Dowlais management team has demonstrated a proven track
record of restructuring resulting in operational improvements.

·    High margins, with strong earnings accretion, cash flow and balance
sheet - The Combined Group's enhanced customer, geographic, and product
diversification supports a best-in-class financial profile with clear
opportunities for improved profitability. The Combination results in an
attractive financial profile within the automotive supplier landscape, with
revenue of approximately $12 billion and Adjusted EBITDA margins of
approximately 14 per cent. (inclusive of run rate synergies). Based on the
terms of the Combination, the Combined Group's day-one net leverage is
expected to be approximately 2.5 times (inclusive of full run rate synergies).
AAM's capital allocation policy will prioritise debt repayment whilst
supporting organic growth until net leverage is below 2.5 times, at which
point AAM intends to move to a more balanced capital allocation policy.

4.         Financial benefits of the Combination

Quantified cost synergies

The AAM Directors, having reviewed and analysed the potential cost synergies
of the Combination, and considering the factors they can influence, are highly
confident in the Combined Group's ability to realise approximately $300
million of annual run rate cost synergies, expected to be substantially
achieved by the end of the third year following Completion.

The quantified cost synergies, expected to originate from the cost bases of
AAM and Dowlais, are anticipated to be realised primarily from:

·    SG&A - approximately 30 per cent. across the following sources:

o  Eliminating duplicate public company costs and other costs;

o  Optimisation of the combined workforce;

o  Streamlining of engineering, research, and development expenses; and

o  Elimination of duplicate business and technical offices.

·    Purchasing - approximately 50 per cent. across the following sources:

o  Leveraging enhanced economies of scale and spend to reduce supply costs;

o  Utilising vertical integration capabilities to deliver insourcing
initiatives; and

o  Achieving global freight and logistical savings through increased scale,
utilisation and benefits from third-party logistics suppliers.

·    Operations - approximately 20 per cent. across the following sources:

o  Increasing operating efficiencies through the implementation of a
best-of-best operating system; and

o  Optimising the combined global manufacturing footprint.

The AAM Directors expect that approximately 60 per cent. of the annual run
rate cost synergies will be realised by the end of the second year following
Completion, and the full run rate cost savings are expected to be
substantially achieved by the end of the third year following Completion.

The AAM Directors expect that the one-off costs required to deliver on the
synergy plan are approximately equal to one year of full run rate savings.

In addition, the AAM Directors expect an increase in operating working capital
of approximately $13 million required to deliver identified run rate freight
and logistics synergies.

The synergy savings stated are net of anticipated dis-synergies (expected to
be approximately $22 million).

The expected synergies will accrue as a direct result of the Combination and
would not be achieved on a standalone basis.

These statements of estimated cost savings and synergies relate to future
actions and circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies referred to
herein may not be achieved, may be achieved later or sooner than estimated, or
those actually achieved could be materially different from those estimated.
For the purposes of Rule 28 of the Code, the statements of estimated cost
savings and synergies contained in this Announcement are solely the
responsibility of AAM and the AAM Directors. Any statement of intention,
belief or expectation for the Combined Group following the Effective Date is
also an intention, belief or expectation of the AAM Directors and not of the
Dowlais Directors.

These statements are not intended as a profit forecast or profit estimate for
any period and should not be interpreted as such. No part of these statements,
or this Announcement generally, should be construed or interpreted to mean
that the Combined Group's earnings in the first year following the Effective
Date, or in any subsequent period, would necessarily match or be greater than
or be less than those of AAM and/or Dowlais for the relevant preceding
financial period or any other period.

Appendix 6 to this Announcement includes a copy of these statements of
anticipated cost savings and synergies arising out of the Combination and
provides underlying information and bases of belief and calculation.

Appendix 6 to this Announcement also includes reports from AAM's reporting
accountant, Deloitte, and its financial adviser, J.P. Morgan Cazenove, in
connection with the anticipated Quantified Financial Benefits Statement, as
required pursuant to Rule 28.1(a) of the Code, and provides underlying
information and bases for the reporting accountant's and financial adviser's
respective reports. J.P. Morgan Cazenove, as financial adviser to AAM, has
provided such a report for the purposes of the Code stating that, in their
opinion and subject to the terms of the report, the Quantified Financial
Benefits Statement, for which the AAM Directors are responsible, has been
prepared with due care and consideration. Each of Deloitte and J.P. Morgan
Cazenove has given and not withdrawn its consent to the publication of its
report in this Announcement in the form and context in which it is included.

5.         Mix and Match Facility

Dowlais Shareholders may elect, subject to availability, to vary the
proportions in which they receive cash and New AAM Shares in respect of their
holdings in Dowlais Shares. However, the total number of New AAM Shares to be
issued and the maximum aggregate amount of cash to be paid under the terms of
the Combination will not be varied as a result of elections under the Mix and
Match Facility. Accordingly, satisfaction of elections made by Dowlais
Shareholders under the Mix and Match Facility will depend on the extent to
which other Dowlais Shareholders make offsetting elections.

To the extent that elections cannot be satisfied in full, they will be scaled
down on a pro rata basis. As a result, those Dowlais Shareholders who make an
election under the Mix and Match Facility will not necessarily know the exact
number of New AAM Shares or the amount of cash they will receive until
settlement of the consideration due to them under the terms of the
Combination. The Mix and Match Facility is conditional upon the Combination
becoming Effective.

Elections under the Mix and Match Facility will not affect the entitlements of
those Dowlais Shareholders who do not make such elections.

Further details in relation to the Mix and Match Facility will be contained in
the Scheme Document.

6.         Recommendation

The Dowlais Directors, who have been so advised by Barclays and Rothschild
& Co as to the financial terms of the Combination, consider the terms of
the Combination to be fair and reasonable. In providing their financial advice
to the Dowlais Directors, Barclays and Rothschild & Co have taken into
account the commercial assessments of the Dowlais Directors. Barclays and
Rothschild & Co are providing independent financial advice to the Dowlais
Directors for the purposes of Rule 3 of the Code.

Accordingly, the Dowlais Directors intend to recommend unanimously that Scheme
Shareholders vote in favour of the Scheme at the Court Meeting and Dowlais
Shareholders vote in favour of the Resolutions to be proposed at the General
Meeting (or in the event that the Combination is implemented by way of a
Takeover Offer, that Dowlais Shareholders accept or procure acceptance of such
Takeover Offer) (the "Intention to Recommend") as the Dowlais Directors who
hold Dowlais Shares have irrevocably undertaken to do in respect of their
entire beneficial holdings of 3,864,429 Dowlais Shares, in aggregate,
representing approximately 0.3 per cent. of the issued ordinary share capital
of Dowlais as at 28 January 2025 (being the last Business Day before the date
of this Announcement). Further details of these irrevocable undertakings are
set out at Appendix 3 to this Announcement.

For the avoidance of doubt, as described in paragraph 21 (Melrose ESOT), there
can be no certainty that certain shares in Dowlais will be cancelled for nil
consideration prior to the Effective Date with a resulting increase to the
consideration per Dowlais Share under the terms of the Combination as set out
in paragraph 21 (Melrose ESOT), and the Intention to Recommend as set out
above is based solely on the terms of the Combination as at the date of this
Announcement, and the financial advice received by the Dowlais Directors has
been given on that basis.

The AAM Directors have unanimously approved the Combination and intend to
recommend that AAM Shareholders vote in favour of the amendment to AAM's
certificate of incorporation to increase the number of authorised AAM Shares
and the issuance of the New AAM Shares in connection with the Combination.
J.P. Morgan has acted as financial adviser to AAM in relation to the
Combination.

7.         Background to and reasons for the recommendation

Dowlais is a specialist engineering group focused on the automotive sector.
Since its listing in April 2023, Dowlais has made strong progress on its
strategy to accelerate its transition to a power-agnostic business model and
has continued to deliver operational and performance improvements despite a
challenging market environment.

The Dowlais Directors remain fully confident that Dowlais will continue to
execute successfully on its strategic priorities, leaving it better positioned
to navigate market volatility and deliver sustainable, profitable growth and
cash generation.

While the Dowlais Directors did not solicit an offer for Dowlais, the Dowlais
Directors remain focused on maximising the full value of the Dowlais for the
benefit of its shareholders by considering all available options. In
contemplating the merits of the Combination for shareholders, the Dowlais
Board, has considered carefully a number of factors including:

·    a compelling strategic rationale, creating a Combined Group with
enhanced scale, highly complementary product portfolio, technological
expertise, industrial footprint and global diversification to compete in a
dynamic and changing business environment;

·    the opportunity for significant value creation from synergies
resulting from the consolidation of two leading businesses with market leading
capabilities;

·    a combined leadership team blending the best talent from both
businesses;

·    a highly complementary portfolio of driveline products - sideshafts,
propshafts, AWD systems, axles for ICE vehicles and EVs;

·    a sophisticated metal forming components capability - forging,
machining, casting and sintering, providing a perfect strategic fit for Powder
Metallurgy to drive external growth;

·    continued volatility in the automotive industry as the global
transition to electrified mobility varies by region leading to continued
uncertainty of industry volumes, customer mix and future technology needs; and

·    an assessment of the value that could potentially be unlocked for the
benefit of Dowlais shareholders through a sale of Dowlais' GKN Powder
Metallurgy business, as evaluated through the strategic review announced at
the Half Year Results on 13 August 2024.

In assessing the Combination, the Dowlais Directors have focused on both the
near-term and long-term value that the Combination is expected to deliver to
Dowlais Shareholders as well as the implications for Dowlais' stakeholders.

The Dowlais Directors believe that the Combination represents an attractive
opportunity to accelerate the realisation of shareholder value through the
establishment of a global, diversified automotive supplier, better-positioned
together to navigate both the short-term challenges and long-term market
dynamics in the automotive sector.

The Dowlais Directors believe that the Combination is based on a compelling
strategic, industrial and financial rationale, including:

·    combining two world-class businesses that are aligned strategically,
culturally and geographically, to create a global automotive supplier, with
the enhanced scale, and the product portfolio, manufacturing footprint and
technology required to compete in a dynamic market environment;

·    building greater resilience through increased global scale and
product diversification;

·    creating the necessary financial strength to accelerate investment in
new products and technologies;

·    enhancing the opportunity to leverage combined knowhow to better
serve customers' needs and secure new business;

·    offering a highly complementary portfolio of products across a broad
range of automotive segments, supporting ICE, hybrid and electric powertrains
in multiple geographies with a diversified customer base;

·    unlocking meaningful cost synergies for the Combined Group; and

·    resulting in a Combined Group with a strong balance sheet supported
by a strong and attractive cash profile.

In considering the terms of the Combination and determining whether they
reflected an appropriate valuation of Dowlais and its future prospects, the
Dowlais Directors took into account a number of factors, including:

·    that consideration in New AAM Shares provides Dowlais Shareholders
with the ability to remain fully invested in the Combined Group through
Dowlais Shareholders owning approximately 49 per cent of the Combined Group;

·    the terms of the Combination represent a total implied value of 85.2
pence per Dowlais share, based on the Closing Price of $5.82 for each AAM
Share and £/US$ exchange rate of 1.2434 on 28 January 2025 (being the close
of business on the last Business Day before the date of this Announcement);
and

·    the opportunity for Dowlais Shareholders to participate in the
anticipated value creation from the substantial synergies which are expected
to be delivered through the Combination and accrue to the shareholders of the
Combined Group.

The Dowlais Directors believe that Dowlais has a clear and compelling
standalone strategy that would continue to deliver shareholder value, however
it is their belief that the proposed Combination would accelerate shareholder
value creation through the combination of both the immediate premium and the
opportunity to continue to participate in the long term prospects of the
Combined Group.

In considering the Combination, the Dowlais Directors have taken into account
AAM's stated intentions for the business and its employees as set out in
paragraph 3 (Background to and reasons for the Combination) and paragraph 12
(Strategic plans and intentions with regard to management, employees, pensions
and places of business).

Following careful and thorough consideration of the financial terms of the
Combination, the strategic rationale and the anticipated financial benefits of
the Combination, including the above factors, the Dowlais Directors intend to
recommend unanimously that Dowlais Shareholders vote, or procure voting, in
favour of the Scheme at the Court Meeting and the Resolutions to be proposed
at the Dowlais General Meeting.

8.         Information relating to AAM

As a leading global tier 1 automotive and mobility supplier, AAM designs,
engineers and manufactures driveline and metal forming technologies to support
electric, hybrid and internal combustion vehicles. AAM's mission is to deliver
efficient, powerful and innovative solutions for its customers.

Headquartered in Detroit, Michigan, AAM has over 75 facilities in 16 countries
across North America, Latin America, Europe and Asia. AAM employs
approximately 21,000 employees globally. AAM is a Delaware corporation and AAM
Shares are publicly traded on the New York Stock Exchange (NYSE:AXL).

AAM has established a high-efficiency product portfolio that is designed to
improve axle efficiency and fuel economy through innovative product design
technologies. Its portfolio includes high-efficiency axles, aluminium axles
and all-wheel-drive applications. AAM's metal forming segment represents the
largest automotive forging operation in the world, and provides engine,
transmission, driveline and safety-critical components for light, commercial
and industrial vehicles. Net sales for 2023 were approximately $6.08 billion.

9.         AAM current trading and outlook

AAM updates its full year 2024 financial estimates as follows:

AAM FY24 Profit Estimate

For full year 2024:

·    AAM is estimating sales in the range of $6.10 - $6.15 billion.

·    AAM is estimating Adjusted EBITDA in the range of $740 - $750
million.

·    AAM is estimating Adjusted free cash flow in the range of $220 - $230
million.

The statements above in relation to Adjusted EBITDA and Adjusted free cash
flow (together, the "AAM FY24 Profit Estimate") constitute profit estimates
for the purposes of the Code.

The assumptions and basis of preparation on which the AAM FY24 Profit Estimate
is based and the confirmations from the AAM Directors as required by Rule
28.1(c) of the Code are set out in Appendix 4 to this Announcement.

10.       Information relating to Dowlais

Dowlais is a specialist engineering group focused on the automotive sector.
Dowlais develops and delivers precisely engineered solutions that are shaping
the future of the automotive industry through its two leading high-technology
engineering businesses: GKN Automotive and GKN Powder Metallurgy.

·    GKN Automotive: a global leader in the development and production of
sideshafts, propshafts, AWD systems and advanced differentials and a trusted
partner to over 90 per cent. of global automotive OEMs. Its products drive the
wheels of around half the world's light vehicles, and it has been a pioneer
in the development of eDrive systems, remaining at the forefront of electric
vehicle powertrain technology.

·    GKN Powder Metallurgy: a global leader in the production of sintered
metal products for the automotive and industrial sectors and a world-class
manufacturer of atomised metal powders. Its world-class engineering expertise
and sustainable technology enables the design and production of parts with
complex geometries, higher densities and improved physical properties.

Dowlais is headquartered in the United Kingdom, and operates across the
Americas, Europe and Asia with over 70 manufacturing facilities and seven
global innovation centres. Dowlais employs approximately 30,000 employees
globally, including its joint ventures. Dowlais Shares are publicly traded on
the London Stock Exchange (LSE: DWL).

11.       Dowlais current trading

Overall performance for the year ended 31 December 2024 was in line with
management's expectations, demonstrating Dowlais' resilience in navigating a
market environment that has continued to be volatile. Dowlais has executed
well on its strategic priorities, with a continued focus on delivering
operational efficiencies and commercial recoveries amidst challenging market
conditions. Please see further details on the Dowlais FY24 Profit Estimate in
Appendix 5 to this Announcement.

Dowlais plans to announce its full year results on 5 March 2025.

12.       Strategic plans and intentions with regard to management,
employees, pensions and places of business

Board, management team and employees of the Combined Group

AAM recognises and greatly respects the expertise and experience of Dowlais'
management and employees. Consequently, AAM places significant importance on
the continued contributions of Dowlais' employees to the success of the
Combined Group following completion of the Combination. AAM intends to
integrate the businesses and blend the management teams to ensure that
management experience and expertise is retained for the benefit of the
Combined Group as a whole.

David C. Dauch will serve as the Chairman and Chief Executive Officer of the
Combined Group. In addition, Roberto Fioroni (Chief Financial Officer,
Dowlais), Helen Redfern (Chief People, Sustainability and Communications
Officer, Dowlais), Markus Bannert (Chief Executive Officer, GKN Automotive),
and Jean-Marc Durbuis (Chief Executive Officer, GKN Powder Metallurgy) will be
invited to join existing AAM executives as part of the senior executive
management team of the Combined Group, in roles to be confirmed. In addition,
there has been no discussion of incentivisation arrangements for these or
other members of Dowlais' senior management team.

It is also expected that Simon Mackenzie Smith (Chair, Dowlais) and Fiona
MacAulay, who currently serve on the Dowlais Board, will join the Board of AAM
following completion of the Combination.

At the same time, AAM intends to optimise the structure of the Combined Group
to achieve the anticipated benefits of the Combination. Preliminary
evaluations suggest that annual run rate cost synergies of approximately $300
million are expected to be substantially achieved by the end of the third full
year following completion of the Combination. These synergies would be
achieved through efficiencies across SG&A, procurement, and operational
efficiencies.

While no decisions have been taken, following the synergy analysis AAM intends
a headcount reduction potentially up to approximately 2.5 per cent. of the
total Combined Group workforce. Any headcount reduction would emphasise the
best-in-class approach AAM intends to take and, therefore, the impact as
between employees of the AAM Group and Dowlais Group will be determined as
part of integration. This expected reduction primarily involves: (i)
duplicative corporate, head office, administrative and senior management
positions across AAM's and Dowlais' respective businesses; and (ii) potential
consolidation of certain manufacturing and R&D facilities, as further
referenced below. Provisionally, AAM has identified approximately 500 roles
across the Combined Group (which is inclusive of the approximately 70
positions referred to below as a result of overlap within the R&D
functions) that appear to be duplicative, representing approximately 1 per
cent. of the combined workforce. Additionally, with respect to potential
facility consolidation and operating improvements, AAM intends to make further
headcount reductions potentially up to an additional headcount reduction of
approximately 750 positions, representing approximately 1.5 per cent. of the
total combined workforce.

The finalisation and implementation of any headcount reductions will be
subject to comprehensive planning and appropriate engagement with
stakeholders, including any required information and consultation processes
with any affected employees and any applicable employee representative bodies.
Any affected individuals will be treated in a manner consistent with AAM's and
Dowlais' high standards, culture and practices and in compliance with all
applicable laws. AAM intends to approach employee and management integration
with the aim of retaining and motivating the best talent across the Combined
Group to create a best-in-class organisation.

As set out in the Cooperation Agreement, AAM has agreed that there will be no
material changes to the remuneration or conditions of employment of Dowlais
employees for a period of 12 months following the Combination. However, AAM
does intend to review the alignment of the remuneration and incentivisation
arrangements between employees and management of the Combined Group as part of
its longer term integration planning. This review will also cover other
policies within the Combined Group, with a view to potentially harmonising
these arrangements for employees and management across the Combined Group,
particularly those in equivalent positions, over time as is appropriate and
where possible. The finalisation and implementation of any such harmonisation
will be subject to comprehensive planning and appropriate engagement with
stakeholders, including any required information and consultation processes
with any affected employees and applicable employee representative bodies.

AAM acknowledges the importance and value of Dowlais' employee share-based
incentive arrangements as further detailed at paragraph 17 (Dowlais Share
Plans). In due course, participants in those arrangements will be contacted
regarding the effect of the Combination on their outstanding awards. Details
of the effect of the Combination on outstanding awards will also be set out in
the Scheme Document. Additionally, AAM intends, following the completion of
the Combination, to extend AAM's share-based incentive arrangements to
relevant Dowlais' employees on a basis consistent with arrangements for
equivalent employees of AAM, considering their expected roles within the
Combined Group.

Headquarters, headquarter functions, locations and fixed assets

The Combined Group will have its global headquarters in Detroit, Michigan,
U.S. Consequently, it is anticipated that following completion of the
Combination and a subsequent orderly handover of activities as part of the
wider integration, Dowlais' current headquarters office in London, U.K., would
be closed at the appropriate time, subject to appropriate engagement with
stakeholders, including any required information and consultation processes
with affected employees regarding relocation or severance. In addition, the
Combined Group will continue to have business offices in each major region of
the world.

Following completion of the Combination, AAM intends to evaluate the business,
technical, and manufacturing locations and fixed assets of both AAM and
Dowlais to optimise the performance of the Combined Group. In conducting such
evaluation AAM will look to maximise synergies whilst taking a best of both
approach. This evaluation is expected to result in the rationalisation of
certain sites currently operated by AAM and/or Dowlais. To the extent any
rationalisation results in a headcount reduction, AAM intends to adopt a
best-in-class approach to reflect the functions and roles going forward at
each location.

AAM has not been able to carry out in-person site visits at Dowlais'
manufacturing facilities, nor does it have sufficiently detailed plant-level
information relating to capacity, utilisation, capabilities and available site
space, and therefore has been unable to make definitive plans with respect to
specific manufacturing locations. Preliminary analysis suggests that
optimising the Combined Group's existing footprint would, in addition to the
consolidation of R&D facilities mentioned below, potentially involve the
closure or combination of some manufacturing facilities globally, although the
specific number and locations have not yet been identified. It is expected any
consolidation will be done on a business unit and regional basis. All business
location rationalisation will be implemented in accordance with applicable
law, be subject to comprehensive planning and appropriate engagement with
stakeholders, including any required information and consultation processes
with any affected employees and applicable employee representative bodies.

The headcount reduction resulting from the foregoing consolidations is
included in the 2.5 per cent. headcount reduction referred to above.

Innovation, research and development

AAM values the historic and ongoing investment that Dowlais has made in its
technology, as well as the infrastructure and expertise within the Dowlais
Group to maintain and enhance its existing customer offerings. AAM is
dedicated to being at the forefront of development within the industry, and as
such believes that the Combined Group's research and development (R&D)
capability is integral to its strategy for long-term sustainable growth and
the success of the Combined Group. This involves driving the pace of
innovation by employing the best talent and committing meaningful investments
to create and expand future opportunities. AAM's board and management believe
that combining AAM and Dowlais' R&D Dowlais' capabilities will enable the
development of innovative solutions to support internal combustion engine
(ICE), hybrid and electric powertrains.

While AAM intends to retain Dowlais' R&D capabilities, it is expected
that, following completion of the Combination, at an appropriate time Dowlais'
existing facilities in Auburn Hills, Michigan, which house R&D and other
functions, will be consolidated into AAM's advanced design and technical
centre which is adjacent to AAM's global headquarters in Detroit, Michigan,
and its facility in Rochester Hills, Michigan, both of which are in close
proximity to Auburn Hills. Such integration will involve comprehensive
planning and appropriate engagement with employees and other stakeholders.

It is also expected that there will be a headcount reduction of approximately
70 positions globally within the R&D functions of the Combined Group
because of overlapping projects, activities and management teams as well as
certain operating efficiencies inclusive of any headcount reduction resulting
from consolidation of the R&D facilities in Michigan. This expected
headcount reduction is included within the 2.5 per cent. referenced above.
Consistent with AAM's intended approach to headcount reductions across the
Combined Group the headcount reductions in R&D will be conducted with the
aim of retaining the best talent across the Combined Group.

Pensions

AAM does not intend to make any changes to the agreed employer contributions
into Dowlais' existing defined benefit and defined contribution pension
schemes. This includes maintaining the current arrangements for funding
Dowlais' defined benefit pension schemes, the level of benefits for existing
members, and the admission of new members to these pension schemes following
the Effective Date.

AAM has entered into discussions with the trustee of the Dowlais' U.K. pension
schemes. The trustee has confirmed that, based on the information provided by
AAM thus far and the representations made to date, it has no reason to believe
that the Combination would have a material adverse effect on the employer
covenant or likelihood of benefits being received. Additionally, AAM has
agreed to maintain an open dialogue with the trustee in relation to any future
changes that might affect the covenant supporting Dowlais' U.K. pension
schemes.

Other items

As part of the Combination, any AAM Shares issued to Dowlais Shareholders will
be authorised for primary listing on the New York Stock Exchange.

The Dowlais Shares are currently admitted to the equity shares (commercial
companies) category of the Official List and to trading on the Main Market of
the London Stock Exchange and, as set out in paragraph 19 (Cancellation of
admission to listing and re-registration as a private company), before the
Effective Date, an application shall be made to the FCA and the London Stock
Exchange to cancel such admissions to listing and trading, to take effect on
the Business Day following the Effective Date. Dowlais is also expected to be
re-registered as a private company on or after the Effective Date.

No statements in this paragraph 12 (Strategic plans and intentions with regard
to management, employees, pensions and places of business) constitute
"post-offer undertakings" for the purposes of Rule 19.5 of the Code.

13.       Dividends

In addition to the consideration payable in connection with the Combination,
each Dowlais Shareholder will be entitled to receive the payment of a final
cash dividend by Dowlais of up to 2.8 pence for each Dowlais Share (the "FY24
Final Dividend") (to be paid (subject to the approval of the Dowlais Board) as
part of Dowlais' ordinary course 2024 financial year dividend calendar)
without any reduction of the consideration payable under the terms of the
Combination.

AAM reserves the right to reduce the consideration payable in respect of each
Dowlais Share under the terms of the Combination to the extent that the FY24
Final Dividend exceeds 2.8 pence per Dowlais Share. If any dividend or other
distribution is announced, declared, made or paid, or becomes payable, in
respect of Dowlais Shares on or after the date of this Announcement and before
the Effective Date, other than the FY24 Final Dividend or any repurchases of
Dowlais Shares by Dowlais pursuant to the Buyback Programme, AAM reserves the
right to reduce the consideration payable in respect of each Dowlais Share by
the amount of all or part of any such dividend or other distribution. If AAM
exercises this right or makes such a reduction in respect of a dividend, other
distribution or return of capital that has not been paid, Dowlais Shareholders
will be entitled to receive and retain that dividend, other distribution or
return of capital.

From the date of this Announcement until the Effective Date, AAM is not
permitted to announce, declare, make or pay any dividend, other distribution
or return of capital and, if AAM does not comply with this restriction,
Dowlais shall be entitled (at its sole discretion) to declare and pay an
equalising dividend to Dowlais Shareholders, without any consequential
reduction to the consideration.

Further details on these arrangements can be found in Clause 3 of the
Co-operation Agreement and will be set out in the Scheme Document.

14.       Irrevocable undertakings

AAM has received irrevocable undertakings to vote in favour (or procure a vote
in favour) of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting from those Dowlais Directors who hold Dowlais
Shares in respect of their own beneficial shareholdings, totalling 3,864,429
Dowlais Shares representing approximately 0.3 per cent. of the issued ordinary
share capital of Dowlais as at 28 January 2025, being the last Business Day
before the date of this Announcement.

Further details of these irrevocable undertakings are set out in Appendix 3 to
this Announcement.

15.       Financing of the Combination

Concurrently with this Announcement, AAM and certain of its subsidiaries
entered into (i) a Credit Agreement (the "Backstop Credit Agreement") with the
lenders party thereto and JPMorgan Chase Bank N.A., as administrative agent,
(ii) a First Lien Bridge Credit Agreement (the "First Lien Bridge Credit
Agreement") with the lenders party thereto and JPMorgan Chase Bank N.A., as
administrative agent and (iii) a Second Lien Bridge Credit Agreement (the
"Second Lien Bridge Credit Agreement" and together with the First Lien Bridge
Credit Agreement, the "Bridge Credit Agreements") with the lenders party
thereto and JPMorgan Chase Bank N.A., as administrative agent.

The Backstop Credit Agreement provides for term loans in an aggregate
principal amount of $1.98 billion and revolving credit facilities in an
aggregate amount of $1.25 billion. Proceeds of the commitments provided under
the Backstop Credit Agreement will be used, together with proceeds of the
commitments provided under the Bridge Credit Agreements, to finance the
Combination, including the cash consideration payable to Scheme Shareholders
and debt refinancing costs, and to refinance in full the Existing Credit
Agreement (as defined below). Subject to the terms of the Backstop Credit
Agreement, AAM expects to replace the Backstop Credit Agreement before the
closing of the Combination by seeking to obtain the consent of its existing
lenders to amend AAM's existing syndicated term loans and revolving credit
facilities under AAM's credit agreement, dated as of March 11, 2022 (as
amended from time to time, the "Existing Credit Agreement"), by and among AAM,
certain of its subsidiaries, the lenders party thereto and JPMorgan Chase
Bank, N.A., as administrative agent, to (i) increase the maximum revolving
credit facility amount by $425 million to $1.35 billion and (ii) add a new
term loan facility (which will be utilised, together, in part, with the
existing facilities thereunder, to finance the Combination) and to effect
certain other changes thereto in connection with the Combination.

The First Lien Bridge Credit Agreement provides for commitments of up to $843
million and the Second Lien Bridge Credit Agreement provides for commitments
of up to $500 million. Proceeds from the commitments provided under the Bridge
Credit Agreements will be used to finance the Combination, including the cash
consideration payable to Scheme Shareholders and debt refinancing costs.
Subject to the conditions in the Bridge Credit Agreements, AAM intends to
reduce commitments or the borrowings under the Bridge Credit Agreements by
accessing the debt capital markets prior to or following the closing of the
Combination. Such debt issuance would be subject to market and other
conditions and this Announcement does not constitute the offer or sale of any
securities in any jurisdiction.

J.P. Morgan Cazenove, as financial adviser to AAM, is satisfied that
sufficient resources are available to AAM to satisfy in full the cash
consideration payable to Scheme Shareholders pursuant to the terms of the
Combination.

Further information on the financing of the Combination will be set out in the
Scheme Document.

16.       Combination‑related arrangements

Confidentiality Agreement

AAM and Dowlais entered into the Revised Confidentiality Agreement on 14
January 2025 pursuant to which each of AAM and Dowlais has undertaken to keep
certain information relating to the Combination and to the other party
confidential and not to disclose such information to third parties (except to
certain permitted parties) for the purposes of evaluating the Combination
unless required by law or regulation. The Revised Confidentiality Agreement
also contains: (i) reciprocal customary non-solicit provisions from the date
of the Revised Confidentiality Agreement until 12 months after the earlier of
the cessation of discussions between AAM and Dowlais in relation to the
Combination and the termination or lapse of the Scheme (or, if the Combination
is implemented by way of a Takeover Offer, the Takeover Offer); and (ii)
customary standstill provisions applicable to AAM only for a period of 12
months after the date of the Revised Confidentiality Agreement, in each case
subject to customary carve-outs. The Revised Confidentiality Agreement amended
an earlier confidentiality agreement entered into between AAM and Dowlais on
29 October 2024, which was on the same terms as the Revised Confidentiality
Agreement, save for the reciprocal non-solicit provisions applied for 12
months from 29 October 2024.

Clean Team Agreement

Dowlais and AAM have entered into a Clean Team Agreement dated 13 December
2024, which sets out, among other things, how confidential information that is
competitively sensitive can be disclosed, used or shared between Dowlais'
clean team individuals and/or external advisers retained by Dowlais and AAM's
clean team individuals and/or external advisers retained by AAM.

 

Joint Defense Agreement

Dowlais, AAM and their respective external legal counsels have entered into a
Joint Defense Agreement dated 6 December 2024, the purpose of which is to
ensure that the exchange and/or disclosure of certain materials, in particular
in relation to the antitrust and regulatory workstreams, only takes place
between their respective external legal counsels and external regulatory
experts, and does not diminish in any way the confidentiality of such
materials and does not result in a waiver of any privilege, right or immunity
that might otherwise be available.

Co-operation Agreement

On the date of this Announcement, AAM and Dowlais have entered into a
Co-operation Agreement in relation to the Combination pursuant to which, among
other things:

·    AAM has agreed to use all reasonable endeavours to obtain the
regulatory conditions and authorisations as soon as reasonably practicable
following date of this Announcement and in any event in sufficient time to
enable the Effective Date to occur by the Long Stop Date;

·    AAM and Dowlais have agreed to certain customary undertakings to
cooperate in relation to such regulatory clearances and authorisations;

·    AAM has agreed to provide Dowlais with certain information for the
purposes of the Scheme Document and otherwise assist with the preparation of
the Scheme Document and Dowlais has agreed to provide AAM with certain
information for the purposes of the AAM Proxy Statement; and

·    AAM has agreed to take certain steps to assist certain Dowlais
Shareholders in taking any required action as a result of the potential
application of US withholding tax under Section 304 of the US Internal Revenue
Code, including the provision of any certifications which may be required to
be made by Dowlais Shareholders to certify whether or not it meets the
requirements for exemption from U.S. Deemed Dividend Tax (and therefore
potentially not be subject to such withholding tax).

The Co-operation Agreement records the intention of AAM and Dowlais to
implement the Combination by way of a Scheme, subject to AAM's right to switch
to a Takeover Offer in certain circumstances. AAM and Dowlais have agreed to
certain customary provisions if the Scheme should switch to an Offer.

The Co-operation Agreement also contains provisions that shall apply in
respect of Dowlais Shareholders' dividend entitlements (as summarised in
paragraph 13 (Dividends) of this Announcement) and directors' and officers'
insurance, as well as the Dowlais Share Plans, other incentive arrangements
and other employee-related matters (further details of which will be provided
in the Scheme Document). AAM has agreed that from the date of the Co-operation
Agreement until the Effective Date it shall not announce, declare, make or pay
any dividends to AAM Shareholders (as summarised in paragraph 13 (Dividends)
of this Announcement). In addition, AAM has also committed, from the date of
the Co-operation Agreement until the earlier of receipt of the AAM Shareholder
approvals, not to solicit or engage in any discussions of alternative
proposals to the Combination (subject to certain limited exceptions). The
Co-operation Agreement provides that AAM will pay a break fee to Dowlais in
the following amounts and circumstances (subject to certain exceptions and
exclusions):

·    $50 million, in cash, if AAM's Board no longer recommends the
Combination or if AAM fails to hold the AAM Shareholders Meeting prior to the
Long Stop Date;

·    $50 million, in cash, if AAM invokes the Conditions set out in 3
(Official authorisations and regulatory clearances) and 6 (General Third Party
approvals) of Part A of Appendix 1 to this Announcement or such Condition has
not been satisfied or waived by AAM by the Long Stop Date; or

·    $14 million, in cash, if AAM Shareholders do not approve the
resolutions required to implement the Combination at the AAM Shareholders
Meeting and there has been no change in the AAM Board's recommendation.

The Co-operation Agreement shall terminate in certain customary circumstances,
including but not limited to:

·    if agreed in writing between AAM and Dowlais;

·    upon service of written notice by AAM to Dowlais if the Dowlais
Directors change their recommendation in respect of the Combination;

·    upon service of written notice by either AAM or Dowlais to the other
if: (i) a competing offer becomes effective or is declared or becomes
unconditional; (ii) the Combination is withdrawn, terminates or lapses in
accordance with its terms; (iii) prior to the Long Stop Date, any Condition
has (with the consent of the Panel) been invoked by AAM; (iv) the Scheme is
not approved at the Court Meeting, the Resolutions to be proposed at the
General Meeting are not passed or the Court refuses to sanction the Scheme;
(v) unless otherwise agreed by AAM and Dowlais in writing or required by the
Panel, the Effective Date has not occurred by the Long Stop Date; or (vi) such
resolution or resolutions as are necessary to approve, effect and implement
the Combination, including to authorise the creation, allotment and issue of
the New AAM Shares, are not passed at the AAM Shareholder Meeting; or

·    upon service of notice by Dowlais to AAM if: (i) AAM makes an
announcement prior to publication of the AAM Proxy Statement that it will not
convene the AAM Shareholder Meeting or it intends not to file the AAM Proxy
Statement with the SEC or transmit it to AAM Shareholders; (ii) the AAM Proxy
Statement does not include the AAM Directors' recommendation; or (iii) the AAM
Directors change their recommendation in respect of the Combination; and

·    upon the Effective Date.

Pensions Agreement

AAM, Dowlais and the trustees (the "Trustees") of Dowlais' UK defined benefit
pension schemes (the "Pension Schemes") have entered into a pensions
agreement. In summary, AAM has agreed that, with effect from and conditional
on Completion: (i) it will consult with the Trustees before changing the key
terms of the material intercompany balances of the main entities supporting
the Pension Schemes' employer covenant and before effecting any intra-group
reorganisation that would move material subsidiaries supporting the Schemes'
employer covenant to another part of the Combined Group; (ii) it will share
information with the Trustees at agreed regular intervals regarding the
Combined Group's financial performance and business prospects, progress on
delivering synergies and material corporate events; and (iii) it supports the
objective of the GKN Group Pension Scheme No. 3 of achieving full funding on a
low dependency funding basis by the "relevant date" in accordance with
pensions legislation and will consider in good faith potential courses of
action to achieve that objective as part of the next actuarial valuation. AAM
has also provided confirmations about the information shared with the Trustees
in connection with the Combination and the Trustees have confirmed that, based
on the information provided by AAM thus far and the representations made to
date, they consider that the Combination would not have a materially
detrimental effect on the Pension Schemes. The agreement also contains
customary confidentiality provisions subject to certain standard exceptions.

17.       Dowlais Share Plans

Participants in the Dowlais Share Plans shall be contacted regarding the
effect of the Combination on their rights under the Dowlais Share Plans and
appropriate proposals will be made to such participants in due course. Details
of these proposals will be set out in the Scheme Document.

Arrangements between AAM and Dowlais management

Liam Butterworth, Roberto Fioroni, John Nicholson and Helen Redfern

In order to promote the retention of Liam Butterworth and Roberto Fioroni,
currently Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO")
of Dowlais respectively, through to the completion of the Combination, AAM has
agreed that it will make cash payments of 150 per cent. to the CEO and 120 per
cent. to the CFO of their base salary (the "Executive Director Transaction
Awards"), as detailed in the Co-operation Agreement. The Executive Director
Transaction Awards will be paid, conditional on completion of the Combination
and Dowlais being delisted from the London Stock Exchange: (i) 50 per cent.
within 30 days of Completion of the Combination; and (ii) 50 per cent. within
30 days of the date that is six months after Completion of the Combination.
Payment of the Executive Director Transaction Awards is subject to the CEO or
CFO (as relevant) being employed by the Combined Group and not under notice on
the relevant payment date or having been subject to, or received notice of, a
Qualifying Termination (as defined in the Co-operation Agreement) before the
relevant payment date. In the event of the CEO or CFO being subject to a
Qualifying Termination, the Transaction Award will be payable as soon as
practicable after termination of employment.

In order to promote the retention of John Nicholson and Helen Redfern,
currently General Counsel ("GC") and Chief People, Sustainability and
Communications Officer ("CPSCO") of Dowlais respectively, through to the
completion of the Combination, Dowlais will make cash payments of 222 per
cent. to the GC and 117 per cent. to the CPSCO of their base salary (the
"Retention Awards"). The Retention Awards will be paid: (i) 50 per cent.
within 30 days of Completion of the Combination; and (ii) 50 per cent. within
30 days of the date that is six months after Completion of the Combination.
Payment of the Retention Awards is subject to the GC or CPSCO (as relevant)
being employed by the Combined Group and not under notice on the relevant
payment date or having been subject to, or received notice of, a Qualifying
Termination (as defined in the Co-operation Agreement) before the relevant
payment date. In the event of the GC or CPSCO being subject to a Qualifying
Termination, the Retention Award will be payable as soon as practicable after
termination of employment.

As required by, and solely for the purposes of, Rule 16.2 of the Code,
Barclays and Rothschild & Co have reviewed the terms of the CEO Executive
Director Transaction Award, CFO Executive Director Transaction Award, the GC
Retention Award and the CPSCO Retention Award together with other information
deemed relevant and confirmed that, in their opinion, the Executive Director
Transaction Awards and the Retention Awards are fair and reasonable. In
providing their advice, Barclays and Rothschild & Co, have taken into
account the commercial assessments of the Dowlais Directors. Barclays and
Rothschild & Co are acting as the independent financial advisers to
Dowlais for the purposes of Rule 3 of the Code.

18.       Structure of and conditions to the Combination

It is intended that the Combination will be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act,
although AAM reserves the right to elect to implement the Combination by means
of a Takeover Offer, subject to the terms of the Co-operation Agreement, and
obtaining the consent of the Panel. The purpose of the Scheme is to provide
for AAM to become the owner of the entire issued and to be issued ordinary
share capital of Dowlais. The Scheme is an arrangement between Dowlais and the
Scheme Shareholders and is subject to the approval of the Court. The procedure
involves, among other things, an application by Dowlais to the Court to
sanction the Scheme, in consideration for which Scheme Shareholders will
receive cash on the basis described in paragraph 2 (The Combination) of this
Announcement.

On the Scheme becoming Effective: (i) it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting and the General Meeting (and, if they attended and voted,
whether or not they voted in favour); and (ii) share certificates in respect
of Scheme Shares will cease to be of value and should be destroyed and
entitlements to Scheme Shares held within the CREST system will be cancelled.
The New AAM Shares will be issued by AAM and (subject to the applicability of
any U.S. withholding tax as described in this Announcement) the cash
consideration payable under the terms of the Combination will be despatched to
Scheme Shareholders by AAM no later than 14 days after the Effective Date.

Any Dowlais Shares issued before the Scheme Record Time will be subject to the
terms of the Scheme. The Resolutions to be proposed at the General Meeting
will, among other matters, provide that the Dowlais Articles be amended to
incorporate provisions requiring any Dowlais Shares issued after the Scheme
Record Time (other than to AAM or its nominee(s)) to be automatically
transferred to AAM on the same terms as the Combination (other than terms as
to timings and formalities). The provisions of the Dowlais Articles (as
amended) will avoid any person (other than AAM or its nominee(s)) holding
ordinary shares in the capital of Dowlais after the Effective Date.

The Combination is subject to a number of Conditions and certain further terms
set out in Appendix 1 to this Announcement and to the full terms and
conditions to be set out in the Scheme Document, including, among other
things:

·        the approval of the Scheme by a majority in number of the
Scheme Shareholders, representing not less than 75 per cent. in value of the
Scheme Shares held by those Scheme Shareholders, present and voting, either in
person or by proxy, at the Court Meeting;

·        the passing of the Resolutions by the requisite majority of
Dowlais Shareholders at the General Meeting;

·        the Scheme being sanctioned by the Court (without
modification, or with modification on terms agreed by AAM and Dowlais) and a
copy of the Court Order being delivered to the Registrar of Companies;

·        the receipt of certain regulatory and antitrust approvals
(including the EU Antitrust Condition, the U.S. Antitrust Condition, the China
Antitrust Condition, the Brazil Antitrust Condition and the Mexico Antitrust
Condition);

·        the amendment to AAM's certificate of incorporation to
increase the number of authorised AAM Shares being duly approved by the
affirmative vote of the holders of a majority in voting power of the AAM
Shares entitled to vote thereon at the AAM Shareholder Meeting and the
issuance of the New AAM Shares in connection with the Combination being duly
approved by the affirmative vote of the holders of a majority in voting power
present in person or by proxy at the AAM Shareholder Meeting;

·        confirmation having been received by AAM that the New AAM
Shares have been approved for listing, subject to official notice of issuance,
on the New York Stock Exchange; and

·        the Scheme becoming Effective no later than the Long Stop
Date.

It is expected that the Scheme Document, containing further information about
the Combination (including the expected timetable for the Combination and how
Dowlais Shareholders can hold, access and trade their interests in New AAM
Shares), together with notices of the Court Meeting and General Meeting, the
Forms of Proxy and the Forms of Election in relation to the Mix and Match
Facility, will be posted to Dowlais Shareholders in May or June 2025. The
extended period until publication of such documentation in relation to the
Combination has been agreed with the Panel and Dowlais and is to allow the
Scheme Document to be published at or around the same time as the mailing of
the AAM Proxy Statement following publication of the annual results of both
AAM and Dowlais for the year ended 31 December 2024 and allowing for any SEC
review period of the AAM Proxy Statement (if required). Subject to the
satisfaction or, where permitted, waiver of all relevant conditions, including
the Conditions, and certain further terms set out in Appendix 1 to this
Announcement and to be set out in the Scheme Document, and subject to the
approval and availability of the Court, it is expected that the Scheme will
become Effective in 2025.

Shareholders' attention is drawn to the section entitled "High-Level U.S.
Federal Income Tax Consequences" in this Announcement. The Scheme Document
will contain details on the potential application of section 304 of the U.S.
Internal Revenue Code (IRC), and the potential resulting U.S. withholding tax
at a rate of up to 30 per cent. to the cash consideration received pursuant to
the Combination, and will provide information for Dowlais Shareholders on how
to certify whether or not it meets the requirements for exemption from U.S.
Deemed Dividend Tax (and therefore potentially not be subject to such
withholding tax), as described further below in the section entitled
"High-Level U.S. Federal Income Tax Consequences".

The Scheme will be governed by English law and will be subject to the
jurisdiction of the Court. The Scheme will be subject to the applicable
requirements of the Code, the Panel, the London Stock Exchange, the Court and
the FCA.

19.       Cancellation of admission to listing and re-registration as a
private company

It is intended that dealings in, and registration of transfers of, Dowlais
Shares will be suspended shortly before the Effective Date at a time to be set
out in the Scheme Document. It is further intended that applications will be
made to the London Stock Exchange to cancel trading in Dowlais Shares on the
Main Market of the London Stock Exchange, and to the FCA to cancel the listing
of Dowlais Shares on the Official List, in each case with effect from or
shortly following the Effective Date.

On the first Business Day after the Effective Date, entitlements to Dowlais
Shares held within the CREST system will be cancelled, and share certificates
in respect of Dowlais Shares will cease to be valid.

It is also intended that, following the Effective Date, Dowlais will be
re-registered as a private limited company.

In addition, the New AAM Shares will be authorised for primary listing on the
New York Stock Exchange subject to official notice of issuance.

20.       Interests in Dowlais Shares

As at close of business on 28 January 2025 (being the last Business Day before
the date of this Announcement), save for the irrevocable undertakings referred
to in paragraph 14 (Irrevocable undertakings) above, neither AAM, nor any of
the AAM Directors, nor any member of the AAM Group, nor, so far as the AAM
Directors are aware, any person acting in concert with AAM for the purposes of
the Combination, had:

(A)       any interest in, or right to subscribe for, any relevant
securities of Dowlais;

(B)       any short position in (whether conditional or absolute and
whether in the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or right to
require another person to purchase or take delivery of, any relevant
securities of Dowlais;

(C)       procured an irrevocable commitment or letter of intent to
accept the terms of the Combination in respect of relevant securities of
Dowlais; or

(D)       borrowed or lent, or entered into any financial collateral
arrangements in respect of, any relevant securities of Dowlais; or

(E)       entered into any Dealing Arrangement in respect of any
relevant securities of Dowlais.

In the interests of secrecy before this Announcement, AAM has not made any
enquiries in respect of the matters referred to in this paragraph 20 of
certain parties who may be deemed by the Panel to be acting in concert with
AAM for the purposes of the Combination. Enquiries of such parties will be
made as soon as practicable following the date of this Announcement, and AAM
confirms that further disclosure in accordance with Rule 8.1(a) and Note
2(a)(i) on Rule 8 of the Code will be made as soon as possible and by no later
than 12 noon (London time) on 12 February 2025.

21.       Melrose ESOT

Upon the demerger of Dowlais from Melrose Industries PLC ("Melrose"),
27,865,471 Dowlais Shares (being 2.1 per cent. of the total issued ordinary
shares of Dowlais as at 28 January 2025 (being the last Business Day before
the date of this Announcement)), were placed in the Melrose Employee Share
Ownership Trust (the "Melrose ESOT") to satisfy options over Dowlais Shares
granted by Melrose to individuals (being certain Melrose group employees and
executive directors) ("MASP Options") under the Melrose Automotive Share Plan
(the "MASP"). The MASP and the Melrose ESOT are operated independently from
Dowlais and Dowlais has no oversight of either of these, including over the
terms of the MASP, the number of outstanding MASP Options and the number of
shares that vest in accordance with the terms of the MASP. According to the
circular issued by Melrose in connection with the demerger, dated 3 March 2023
(the "Melrose Demerger Circular"), the MASP performance period runs up to (but
excluding) 31 May 2025 (the "MASP Crystallisation Date"). Based on the
disclosures made by Melrose in the Melrose Demerger Circular and the value of
the entire issued share capital of Dowlais implied by the Combination as at 28
January 2025 (being the last Business Day before the date of this
Announcement), the options granted under the MASP are not expected to vest or
become exercisable in accordance with their performance conditions. Based on
the disclosures made by Melrose in the Melrose Demerger Circular, upon a
change of control, scheme of arrangement or winding up of Dowlais (a "Dowlais
Trigger Event"), the options under the MASP shall vest in full and become
immediately exercisable upon the date of, and immediately prior to, the
Dowlais Trigger Event. Although it is not explicit from the disclosure in the
Melrose Demerger Circular, based on such disclosures the Dowlais Trigger Event
could occur only upon such a change of control or scheme of arrangement of
Dowlais becoming effective, rather than simply being announced and it is noted
that Completion is not expected to occur prior to the MASP Crystallisation
Date; however neither Dowlais nor AAM is aware of the discretion (if any)
exercisable under the terms of the MASP, the potential for the MASP to be
amended or the conditions for a change of control, scheme of arrangement or
winding up to constitute a Dowlais Trigger Event and there can therefore be no
certainty as to the treatment of such awards as a result of the Combination.

Melrose's disclosures in the Melrose Demerger Circular state that, if,
immediately after the MASP Crystallisation Date, there remain Dowlais Shares
held by the Melrose ESOT in relation to which MASP Options have lapsed by
operation of the vesting provisions, then it is intended that the relevant
Dowlais Shares shall be transferred to Dowlais (or its nominee) and for such
Dowlais Shares to then be cancelled. Any amounts held by the Melrose ESOT as a
result of prior distributions received by the Melrose ESOT in respect of such
Dowlais Shares shall remain the property of the Melrose ESOT. Dowlais is party
to a tripartite agreement entered into by Dowlais at the time of the demerger
with Melrose and Zedra Trust Company (Guernsey) Limited (acting as trustee for
the MASP) (the "Tripartite Agreement") pursuant to which it has undertaken to
cancel any Dowlais Shares upon receipt from the trustee.

AAM has agreed that, to the extent that the Dowlais Shares held by the Melrose
ESOT are repurchased by Dowlais for nil consideration pursuant to the
Tripartite Agreement prior to Completion (the "Cancelled Shares"), AAM will
increase the cash consideration and the number of New AAM Shares payable in
respect of each Dowlais Share held pursuant to the Combination so as to
allocate the cash consideration and New AAM Shares which the Cancelled Shares
would have received on Completion to the Dowlais Shareholders based on the
fully diluted share capital of Dowlais at the time of such cancellation, with
cash consideration rounded to the nearest pence and the number of New AAM
Shares to four decimal places. So, for example, if all of the 27,865,471
Dowlais Shares held by the Melrose ESOT were to be cancelled and based on the
fully diluted share capital of Dowlais as at 28 January 2025 (being the last
Business Day before the date of this Announcement), the consideration would be
adjusted as follows such that Dowlais Shareholders would be entitled to
receive, for each Dowlais Share:

·    43 pence in cash; and

·    0.0881 New AAM Shares.

There would be no change to the amount of the FY24 Final Dividend a Dowlais
Shareholder may receive.

For the purpose of this paragraph 21 and the above undertaking, the fully
diluted share capital of Dowlais at the time of a cancellation shall be
calculated on the basis of:

(a)        issued share capital of Dowlais at the time of such
cancellation; plus

(b)        all Dowlais Shares which may be issued on or after the date
of such cancellation on the vesting of awards under the Dowlais Share Plans as
at close of business of the day prior to such cancellation; less

(c)        the number of Dowlais Shares held by the employee benefit
trust operated by Dowlais that can be used to satisfy the vesting of awards
under the Dowlais Share Plans as at close of business of the day prior to such
cancellation.

Neither Dowlais nor AAM have seen the terms of the MASP and there can be no
certainty that the MASP Options will lapse or that the Dowlais Shares will be
transferred to Dowlais if a Dowlais Trigger Event has not completed by the
MASP Crystallisation Date. Neither Dowlais nor AAM is aware of the discretion
(if any) exercisable under the terms of the MASP, the potential for the MASP
to be amended or the conditions for a change of control, scheme of arrangement
or winding up of to constitute a Dowlais Trigger Event.

The purpose of these arrangements is to ensure that the total value of the
consideration payable for the entire issued and to be issued share capital of
Dowlais remains the same regardless of whether the MASP Options vest or lapse.

There can therefore be no certainty that any such increase to the
consideration payable per Dowlais Share under the terms of the Combination
will occur. As set out in paragraph 6 (Recommendation), the Intention to
Recommend (as defined in paragraph 6 (Recommendation)) is based solely on the
terms of the Combination as at the date of this Announcement, and the
financial advice received by the Dowlais Directors (as described in paragraph
6 (Recommendation)) has been given on that basis.

AAM will announce any increase to the consideration payable per Dowlais Share
under the terms of the Combination under this paragraph 21 as soon as is
reasonably practicable upon the obligation to effect such increase coming into
effect. To the extent no such increase has been made beforehand, AAM and/or
Dowlais will also provide an update on the latest position based on their
understanding in advance of the Court Meeting.

22.       Fractional entitlements

Fractions of New AAM Shares will not be allotted to Dowlais Shareholders.
Instead, all fractional shares which a holder of Dowlais Shares would
otherwise be entitled to receive will be aggregated and calculations will be
rounded down, and such holder shall receive, in lieu of such fractional
entitlements, cash in an amount (rounded down to the nearest penny) equal to
such fractional amount multiplied by the last reported sale price of AAM
Shares on the New York Stock Exchange (as reported in Bloomberg or, if not
reported therein, in another authoritative source selected by AAM) on the last
Business Day prior to the Effective Date.

23.       Overseas Shareholders

The availability of the Combination and the distribution of this Announcement
to Dowlais Shareholders who are not resident in the United Kingdom may be
affected by the laws of the relevant jurisdiction in which they are located.
Such persons should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction. Dowlais Shareholders who are in
any doubt regarding such matters should consult an appropriate independent
professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale of any securities or
an offer or an invitation to purchase any securities. Dowlais Shareholders are
advised to read carefully the Scheme Document and related Forms of Proxy and
Forms of Election once these have been despatched.

24.       Documents available on website

Copies of the following documents will be available promptly on AAM's and
Dowlais' websites at www.aam.com/investors/offer-for-Dowlais-Group-plc and
www.dowlais.com (http://www.dowlais.com) , respectively, subject to certain
restrictions relating to persons residing in Restricted Jurisdictions until
the end of the Offer Period:

(a)        this Announcement;

(b)        the irrevocable undertakings described in Appendix 3 to this
Announcement;

(c)        the Revised Confidentiality Agreement;

(d)        the Clean Team Agreement;

(e)        the Joint Defense Agreement;

(f)        the Co-operation Agreement;

(g)        the Pensions Agreement;

(h)        consent letters from each of Barclays, Rothschild & Co,
Investec, Deloitte and J.P. Morgan; and

(i)         the documents relating to the financing of the
Combination.

Neither the content of the websites referred to in this Announcement nor the
content of any website accessible from hyperlinks is incorporated into, or
forms part of, this Announcement.

25.       Right to proceed by way of a Takeover Offer

Subject to the terms of the Co-operation Agreement, and obtaining the consent
of the Panel, AAM reserves the right to elect to implement the Combination by
way of a Takeover Offer as an alternative to the Scheme.

In such event, such Takeover Offer will be implemented on the same terms and
conditions, so far as applicable, as those which would apply to the Scheme
subject to appropriate amendments to reflect the change in method of effecting
the Combination, including (without limitation) the inclusion of an acceptance
condition set at 90 per cent. of Dowlais Shares to which the Takeover Offer
relates, (or such lesser percentage as may be determined after consultation
with the Panel (if necessary)), being in any case more than 50 per cent. of
the voting rights normally exercisable at a general meeting of Dowlais,
including, for this purpose, any such voting rights attaching to Dowlais
Shares that are issued before the Takeover Offer becomes or is declared
unconditional (whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise).

26.       General

It is expected that the Scheme Document will be posted to Dowlais Shareholders
in May or June 2025. The extended period until publication of the Scheme
Document has been agreed with the Panel and Dowlais and is to allow the Scheme
Document to be published at or around the same time as the mailing of the AAM
Proxy Statement following publication of the annual results of both AAM and
Dowlais for the year ended 31 December 2024 and allowing for any SEC review
period of the AAM Proxy Statement (if required).

In deciding whether or not to vote or procure votes to approve the Scheme at
the Court Meeting or to vote or procure votes in favour of the Resolutions
relating to the Scheme at the General Meeting in respect of their Dowlais
Shares, Dowlais Shareholders should rely on the information contained, and
follow the procedures described, in the Scheme Document.

Barclays and Rothschild & Co (as financial advisers to Dowlais) and J.P.
Morgan (as financial adviser to AAM) have each given and not withdrawn their
consent to the publication of this Announcement with the inclusion in this
Announcement of the references to their names in the form and context in which
they appear.

The bases and sources for certain financial information contained in this
Announcement are set out in Appendix 2 to this Announcement. Details of
undertakings received by AAM and given by the Dowlais Directors are set out in
Appendix 3. The defined terms used in this Announcement are set out in
Appendix 7.

Enquiries

 AAM

 Christopher M. Son, Vice President, Marketing & Communications      +1 (313) 758-4814

 J.P. Morgan (Exclusive financial adviser to AAM)

 David Walker / Ian MacAllister                                      +1 (212) 270 6000
 Robert Constant / Jonty Edwards                                     +44 (0) 203 493 8000

 FGS Global (PR adviser to AAM)

 Jared Levy / Jim Barron                                             +1 212 687 8080
 Charlie Chichester / Rory King                                      +44 20 7251 3801

 Dowlais

 Investors
 Pier Falcione                                                       +44 (0)7974 974690

 Barclays (Financial adviser and corporate broker to Dowlais)

Guy Bomford / Adrian Beidas / Neal West (Corporate Broking)  +44 (0) 20 7623 2323

 

 Rothschild & Co (Financial adviser to Dowlais)

 Ravi Gupta / Nathalie Ferretti                                      +44 (0) 20 7280 5000

 Investec Bank plc (Joint corporate broker to Dowlais)

Carlton Nelson / Christopher Baird  +44 (0) 20 7597 5970

 

 Montfort Communications (PR adviser to Dowlais)

 Nick Miles / Neil Craven                                            +44 (0) 7739 701 634

                                                                     +44 (0) 7876 475 419

 

Rothschild & Co (Financial adviser to Dowlais)

Ravi Gupta / Nathalie Ferretti

+44 (0) 20 7280 5000

 

Investec Bank plc (Joint corporate broker to Dowlais)

 

 Carlton Nelson / Christopher Baird  +44 (0) 20 7597 5970

 

Montfort Communications (PR adviser to Dowlais)

Nick Miles / Neil Craven

+44 (0) 7739 701 634

+44 (0) 7876 475 419

Allen Overy Shearman Sterling LLP is acting as legal adviser to AAM. Slaughter
and May is acting as legal adviser to Dowlais. Cravath, Swaine & Moore LLP
is acting as U.S. legal adviser to Dowlais.

The person responsible for arranging the release of this Announcement on
behalf of Dowlais is John Nicholson, General Counsel & Company Secretary.

Important notices relating to financial advisers

J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Securities
plc (which conducts its UK investment banking business as J.P. Morgan Cazenove
and which is authorised in the United Kingdom by the Prudential Regulation
Authority and regulated in the United Kingdom by the Prudential Regulation
Authority and the Financial Conduct Authority). J.P. Morgan is acting as
financial adviser exclusively for AAM and no one else in connection with the
Combination and will not regard any other person as its client in relation to
the Combination and will not be responsible to anyone other than AAM for
providing the protections afforded to clients of J.P. Morgan or its
affiliates, nor for providing advice in relation to the Combination or any
other matter or arrangement referred to herein.

Barclays, which is authorised by the Prudential Regulation Authority and
regulated in the United Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively for Dowlais and no one
else in connection with the Combination and will not be responsible to anyone
other than Dowlais for providing the protections afforded to clients of
Barclays nor for providing advice in relation to the Combination or any other
matter referred to in this Announcement.

In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays and its affiliates will continue to act
as exempt principal trader in Dowlais securities on the London Stock Exchange.
These purchases and activities by exempt principal traders which are required
to be made public in the United Kingdom pursuant to the Code will be reported
to a Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com. This information will also be
publicly disclosed in the United States to the extent that such information is
made public in the United Kingdom.

Rothschild & Co, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively for Dowlais and for
no‑one else in connection with the Combination and shall not be responsible
to anyone other than Dowlais for providing the protections afforded to clients
of Rothschild & Co, nor for providing advice in connection with the
Combination or any matter referred to herein. Neither Rothschild & Co nor
any of its affiliates (nor their respective directors, officers, employees or
agents) owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained herein, the
Combination or otherwise. No representation or warranty, express or implied,
is made by Rothschild & Co as to the contents of this Announcement.

Investec, which is authorised in the United Kingdom by the PRA and regulated
in the United Kingdom by the FCA and the PRA, is acting exclusively for
Dowlais and no one else in connection with the subject matter of this
Announcement and will not regard any other person as its client in relation to
the subject matter of this Announcement and will not be responsible to anyone
other than Dowlais for providing the protections afforded to the clients of
Investec, or for providing advice in connection with the subject matter of
this Announcement or any other matters referred to herein. Neither Investec
nor any of its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Investec in connection with the subject matter of this Announcement,
any statement contained herein or otherwise, and no representation, express or
implied, is made by Investec or any of its subsidiaries, branches or
affiliates, or purported to be made on behalf of Investec or any of its
subsidiaries, branches or affiliates, in relation to the contents of this
Announcement, including with regard to the accuracy or completeness of the
Announcement or the verification of any other statements made or purported to
be made by or on behalf of Investec or any of its subsidiaries, branches or
affiliates in connection with the matters described in this Announcement.

Further information

This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval in any jurisdiction pursuant to
the Combination or otherwise. In particular, this Announcement is not an offer
of securities for sale into the U.S. No offer of securities shall be made in
the U.S. absent registration under the U.S. Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, such registration
requirements. The Combination will be made solely through the Scheme Document
(or, if the Combination is implemented by way of a Takeover Offer, the
Takeover Offer documents), which, together with the accompanying Forms of
Proxy and Forms of Election in relation to the Mix and Match Facility, will
contain the full terms and conditions of the Combination, including details of
how to vote in respect of the Combination. Any decision in respect of the
Combination should be made only on the basis of the information in the Scheme
Document (or, if the Combination is implemented by way of a Takeover Offer,
the Takeover Offer document).

Dowlais will prepare the Scheme Document to be distributed to Dowlais
Shareholders. Dowlais and AAM urge Dowlais Shareholders to read the Scheme
Document (or any other document by which the Combination is made) in full when
it becomes available because it will contain important information relating to
the Combination, including details of how to vote in respect of the Scheme.

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.

This Announcement does not constitute a prospectus or a prospectus equivalent
document.

This Announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England.

The Combination will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange and the FCA.

 Neither the SEC nor any U.S. state securities commission has approved,
disproved or passed judgment upon the fairness or the merits of the
Combination or determined if this Announcement is adequate, accurate or
complete. Any representation to the contrary is a criminal offence in the U.S.

Overseas Shareholders

The release, publication or distribution of this Announcement in jurisdictions
other than the UK, and the availability of the Combination to Dowlais
Shareholders who are not resident in the UK, may be restricted by law and
therefore any persons who are not resident in the UK or who are subject to the
laws of any jurisdiction other than the UK (including Restricted
Jurisdictions) should inform themselves about, and observe, any applicable
legal or regulatory requirements. In particular, the ability of persons who
are not resident in the UK or who are subject to the laws of another
jurisdiction to participate in the Combination or to vote their Dowlais Shares
in respect of the Scheme at the Court Meeting, or to execute and deliver Forms
of Proxy appointing another to vote at the Court Meeting on their behalf, may
be affected by the laws of the relevant jurisdictions in which they are
located or to which they are subject. Any failure to comply with applicable
legal or regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in the
Combination disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by AAM or required by the Code, and permitted by
applicable law and regulation, the Combination shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Combination by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.

Accordingly, copies of this Announcement and any formal documentation relating
to the Combination are not being, and must not be, directly or indirectly,
mailed or otherwise forwarded, distributed or sent in or into or from any
Restricted Jurisdiction or any jurisdiction where to do so would constitute a
violation of the laws of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Combination.

Further details in relation to Dowlais Shareholders in overseas jurisdictions
will be contained in the Scheme Document(or, if the Combination is implemented
by way of a Takeover Offer, the Takeover Offer documents).

Additional information for U.S. investors in Dowlais

The Combination relates to an offer for the shares of an English company and
is proposed to be implemented by means of a scheme of arrangement provided for
under English company law. The Combination, implemented by way of a scheme of
arrangement, is not subject to the tender offer rules or the related proxy
solicitation rules under the U.S. Exchange Act. Accordingly, the Combination
is subject to the disclosure requirements and practices applicable to a scheme
of arrangement involving a target company in the UK listed on the London Stock
Exchange, which differ from the disclosure requirements of the U.S. tender
offer and related proxy solicitation rules. If, in the future, AAM exercises
its right to elect to implement the Combination by way of a Takeover Offer and
determines to extend the Takeover Offer into the U.S., such Takeover Offer
will be made in compliance with applicable U.S. laws and regulations.

The New AAM Shares to be issued pursuant to the Combination have not been and
will not be registered under the U.S. Securities Act, and may not be offered
or sold by AAM in the U.S. absent registration or an applicable exemption from
the registration requirements of the U.S. Securities Act. The New AAM Shares
to be issued pursuant to the Combination will be issued pursuant to the
exemption from registration set forth in Section 3(a)(10) of the U.S.
Securities Act. If, in the future, AAM exercises its right to elect to
implement the Combination by way of a Takeover Offer or otherwise determines
to conduct the Combination in a manner that is not exempt from the
registration requirements of the U.S. Securities Act, it will file a
registration statement with the SEC that will contain a prospectus with
respect to the issuance of New AAM Shares. In this event, Dowlais Shareholders
are urged to read these documents and any other relevant documents filed with
the SEC, as well as any amendments or supplements to all such documents,
because they will contain important information, and such documents will be
available free of charge at the SEC's website at www.sec.gov
(http://www.sec.gov) or by directing a request to AAM's contact for enquiries
identified above.

This Announcement contains, and the Scheme Document will contain certain
unaudited financial information relating to Dowlais that has been prepared in
accordance with UK-endorsed International Financial Reporting Standards
("IFRS") and thus may not be comparable to financial information of U.S.
companies or companies whose financial statements are prepared in accordance
with U.S. generally accepted accounting principles. U.S. generally accepted
accounting principles differ in certain significant respects from IFRS.

Dowlais is incorporated under the laws of a non-U.S. jurisdiction, some or all
of Dowlais' officers and directors reside outside the U.S., and some or all of
Dowlais' assets are or may be located in jurisdictions outside the U.S.
Therefore, U.S. Dowlais Shareholders (defined as Dowlais Shareholders who are
U.S. persons as defined in the U.S. Internal Revenue Code or "IRC") may have
difficulty effecting service of process within the U.S. upon those persons or
recovering against Dowlais or its officers or directors on judgments of U.S.
courts, including judgments based upon the civil liability provisions of the
U.S. federal securities laws. Further, it may be difficult to compel a
non-U.S. company and its affiliates to subject themselves to a U.S. court's
judgment. It may not be possible to sue Dowlais or its officers or directors
in a non-U.S. court for violations of the U.S. securities laws.

In accordance with normal United Kingdom practice, AAM or its nominees, or its
brokers (acting as agents), may from time to time make certain purchases of,
or arrangements to purchase, shares or other securities of Dowlais outside of
the U.S., other than pursuant to the Combination, until the date on which the
Combination and/or Scheme becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any such purchases by AAM will not
be made at prices higher than the price of the Combination provided in this
Announcement unless the price of the Combination is increased accordingly. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com.

High-Level U.S. Federal Income Tax Consequences

The receipt of New AAM Shares and cash by Dowlais Shareholders as
consideration for the transfer of Dowlais Shares pursuant to the Combination
may be a taxable transaction for U.S. federal income tax purposes and under
applicable U.S. state and local, as well as foreign and other, tax laws. Such
consequences, if any, are not generally described herein.

For certain Dowlais Shareholders, Section 304 of the IRC may apply to the
Combination if the Dowlais Shareholders, in the aggregate, own stock of AAM
possessing 50 per cent. or more of the total combined voting power or 50 per
cent. or more of the total combined value of all classes of stock of AAM
immediately following Completion, taking into account certain constructive
ownership rules under the IRC and, in the case of a Dowlais Shareholder who
also owns AAM common stock, taking into account any New AAM Shares received by
such Dowlais Shareholder as a result of the Combination. If Section 304 of the
IRC were to apply to the Combination, the cash consideration received pursuant
to the Combination may be subject to U.S. federal income tax as a deemed
dividend ("U.S. Deemed Dividend Tax"). A Dowlais Shareholder should only be
subject to U.S. Deemed Dividend Tax if the Dowlais Shareholder receives cash
under the Combination and also owns AAM Shares. Further, even if a Dowlais
Shareholder also owns AAM Shares, it should only be subject to U.S. Deemed
Dividend Tax if the Dowlais Shareholder owns (i) an equivalent or greater
percentage of AAM Shares than Dowlais Shares at Completion, and (ii) its
indirect ownership interest in Dowlais is not therefore reduced as a result of
the Combination, taking into account certain constructive ownership rules and
the AAM Shares received as consideration in the Combination.

For U.S. Dowlais Shareholders, dividends are generally taxable as ordinary
income, subject to any reduced tax rates or deductions provided under the IRC.
U.S. Dowlais Shareholders who do not actually or constructively own any AAM
Shares immediately prior to the Combination will recognise a capital gain or
loss equal to the difference between the amount of cash received and such U.S.
holder's tax basis in the portion of its Dowlais Shares that is exchanged for
such cash.

For Non-U.S. Dowlais Shareholders, U.S. Deemed Dividend Tax will be collected
via a withholding tax at a 30 per cent. rate (or such lower rate as may be
specified by an applicable income tax treaty) from the cash consideration
received pursuant to the Combination. To establish whether such withholding is
required from the cash consideration paid to each Non-U.S. Dowlais
Shareholder, each Non-U.S. Dowlais Shareholder must, if necessary, complete a
certificate, in the form to be provided in circumstances where it is
necessary, certifying whether or not it meets the requirements for exemption
from U.S. Deemed Dividend Tax. The certification process is not standardised,
and depends upon information properly flowing through the brokerage
network. To the extent relevant, you should consult your retail broker as to
the procedures they employ; it is possible that some brokers may be unfamiliar
with this process.

Failure by a Non-U.S. Dowlais Shareholder to complete and return such
certificate may result in withholding tax at a rate of 30 per cent. (or such
lower rate as may be specified by an applicable income tax treaty) on the full
amount of the cash payable to such Non-U.S. Dowlais Shareholder.

If excess amounts are withheld from the cash consideration payable to a
Non-U.S. Dowlais Shareholder, the Non-U.S. Dowlais Shareholder may obtain a
refund of any such excess amounts by timely filing an appropriate claim with
the IRS.

Dowlais Shareholders that may be concerned about the application of Section
304 of the IRC and the potential treatment of the cash consideration as a
deemed dividend for U.S. federal income tax purposes should take this into
account when determining whether to make an election under the Mix and Match
Facility to receive different proportions of cash and New AAM Shares in
respect of their holdings in Dowlais Shares, which would impact the amount of
Dowlais Shares attributed to them after the Combination.

The receipt of consideration in exchange for Dowlais Shares pursuant to the
Combination may also be subject, under certain circumstances, to FATCA or
other backup withholding with respect to a Dowlais Shareholder that does not
satisfy certain rules with respect to its identity under U.S. or other tax
laws applicable to such Dowlais Shareholder.

Each Dowlais Shareholder is urged to consult with legal, tax and financial
advisers in connection with making a decision regarding the Combination,
including in light of the potential application of Section 304 of the IRC to
the Combination.

Forward-looking statements

This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Combination, and other
information published by AAM and Dowlais contain statements which are, or may
be deemed to be, "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are prospective in nature and are not based on historical facts, but rather on
assumptions, expectations, valuations, targets, estimates, forecasts and
projections of AAM and Dowlais about future events, and are therefore subject
to risks and uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the
forward-looking statements. The forward-looking statements contained in this
Announcement include statements relating to the expected effects of the
Combination on the AAM Group, the Dowlais Group and the Combined Group, such
as the statements about the expected profitable growth, value-enhancing
investments, sustainable capital returns and other characteristics of the
Combined Group, the expected timing and scope of the Combination and other
statements other than historical facts. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words such as
"plans", "expects", "budgets", "targets", "aims", "scheduled", "estimates",
"forecast", "intends", "anticipates", "seeks", "prospects", "potential",
"possible", "assume" or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. AAM and Dowlais
give no assurance that such expectations will prove to be correct. By their
nature, forward-looking statements involve risks (known and unknown) and
uncertainties (and other factors that are in many cases beyond the control of
AAM and/or Dowlais) because they relate to events and depend on circumstances
that may or may not occur in the future.

There are a number of factors that could affect the future operations of the
AAM Group, the Dowlais Group and/or the Combined Group and that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include the
satisfaction (or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and economic
conditions; the impact of pandemics, asset prices; market‑related risks such
as fluctuations in interest rates and exchange rates, industry trends,
competition, changes in government and regulation, changes in the policies and
actions of governments and/or regulatory authorities (including changes
related to capital and tax), changes in political and economic stability
(including exposures to terrorist activities, the UK's exit from the European
Union, Eurozone instability, disruption in business operations due to
reorganisation activities, interest rate, inflation, deflation and currency
fluctuations), the timing impact and other uncertainties of future or planned
acquisitions or disposals or offers, the inability of the Combined Group to
realise successfully any anticipated synergy benefits when the Combination is
implemented (including changes to the board and/or employee composition of the
Combined Group), the inability of the AAM Group to integrate successfully the
Dowlais Group's operations and programmes when the Combination is implemented,
the Combined Group incurring and/or experiencing unanticipated costs and/or
delays (including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Combination when the Combination
is implemented. Other unknown or unpredictable factors could affect future
operations and/or cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should therefore
be construed in the light of such factors. It is not possible to foresee or
identify all such factors.

Each forward-looking statement speaks only as of the date of this
Announcement. Neither the AAM Group nor the Dowlais Group, nor any of their
respective associates or directors, officers or advisers, provides any
representation, warranty, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent
risks and uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers are cautioned not
to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including, without
limitation, under the Code, the UK Market Abuse Regulation, the DTRs and
applicable U.S. securities laws), neither the AAM Group nor the Dowlais Group
is under or undertakes any obligation, and each of the foregoing expressly
disclaims any intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

For a discussion of important risk factors that could cause AAM's actual
results to differ materially from the expectations in the forward-looking
statements, see Part I, Item 1A. under the heading "Risk Factors" in its Form
10-K for the fiscal year ended December 31, 2023 and Part II, Item 1A under
the heading "Risk Factors" in quarterly reports on Form 10-Q for the quarterly
periods ended March 31, 2024, June 30, 2024 and September 30, 2024 filed with
the SEC which also contain additional information regarding forward-looking
statements with respect to AAM.

Solicitation

This Announcement may be deemed to be solicitation material in respect of the
Combination, including the issuance of the New AAM Shares in respect of the
Combination. In connection with the foregoing proposed issuance of the New AAM
Shares, AAM expects to file the AAM Proxy Statement. To the extent the
Combination is effected as a scheme of arrangement under English law, the
issuance of the New AAM Shares in connection with the Combination would not be
expected to require registration under the U.S. Securities Act, pursuant to an
exemption provided by Section 3(a)(10) under the U.S. Securities Act. In the
event that AAM exercises its right to elect to implement the Combination by
way of a Takeover Offer or otherwise determines to conduct the Combination in
a manner that is not exempt from the registration requirements of the U.S.
Securities Act, AAM expects to file a registration statement with the SEC
containing a prospectus with respect to the New AAM Shares that would be
issued in the Combination. Investors and shareholders are urged to read the
AAM Proxy Statement, the Scheme Document, and other relevant documents filed
or to be filed with the SEC or incorporated by reference in the AAM Proxy
Statement (if any) carefully when they become available because they will
contain important information about AAM, the Combination and related matters.
Investors and shareholders will be able to obtain free copies of the AAM Proxy
Statement, the Scheme Document, and other documents filed by AAM with the SEC
at the SEC's website at www.sec.gov (http://www.sec.gov) . In addition,
investors and shareholders will be able to obtain free copies of the AAM Proxy
Statement, the Scheme Document, and other documents filed by AAM with the SEC
at www.aam.com/investors (https://www.aam.com/investors) .

Participants in the Solicitation

AAM and its directors, executive officers and certain other members of
management and employees will be participants in the solicitation of proxies
from AAM's Shareholders in respect of the Combination, including the proposed
issuance of New AAM Shares. Information regarding AAM's directors and
executive officers is contained in the Annual Report on Form 10-K for the
fiscal year ended 31 December 2023 of AAM, which was filed with the SEC on 16
February 2024, the definitive proxy statement on Schedule 14A for the 2024
annual meeting of stockholders of AAM, which was filed with the SEC on 21
March 2024 and the Current Report on Form 8-K of AAM, which was filed with the
SEC on May 2, 2024. Additional information regarding the identity of
participants, and their direct or indirect interests, by security holdings or
otherwise, will be set forth in the AAM Proxy Statement relating to the
Combination when it is filed with the SEC. To the extent holdings of AAM's
securities by its directors or executive officers change from the amounts set
forth in the AAM Proxy Statement, such changes will be reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of Change in
Ownership on Form 4 filed with the SEC. These documents may be obtained free
of charge from the SEC's website at www.sec.gov and AAM's website at
www.aam.com/investors (https://www.aam.com/investors) .

No profit forecasts or estimates

The AAM FY24 Profit Estimate is a profit estimate for the purposes of Rule 28
of the Code. The AAM FY24 Profit Estimate is set out in paragraph 9 of this
Announcement, and the assumptions and basis of preparation on which the AAM
FY24 Profit Estimate is based and the AAM Directors' confirmation, as required
by Rule 28.1 of the Code, are set out in Appendix 4 of this Announcement.

The Dowlais FY24 Profit Estimate is a profit estimate for the purposes of Rule
28 of the Code. The Dowlais FY24 Profit Estimate is set out in of this
Announcement, and the assumptions and basis of preparation on which the
Dowlais FY24 Profit Estimate is based and the Dowlais Directors' confirmation,
as required by Rule 28.1 of the Code, are set out in Appendix 5 of this
Announcement.

Other than the AAM FY24 Profit Estimate and Dowlais FY24 Profit Estimate,
nothing in this Announcement (including any statement of estimated cost
savings or synergies) is intended, or is to be construed, as a profit forecast
or profit estimate for any period or to be interpreted to mean that earnings
or earnings per share for AAM or Dowlais for the current or future financial
years, will necessarily match or exceed the historical published earnings or
earnings per share for AAM or Dowlais, as appropriate.

Quantified Financial Benefits Statement

Statements of estimated cost savings and synergies relate to future actions
and circumstances which, by their nature, involve risks, uncertainties and
contingencies. As a result, the cost savings and synergies referred to in the
Quantified Financial Benefits Statement may not be achieved, may be achieved
later or sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified Financial
Benefits Statement, or this Announcement generally, should be construed as a
profit forecast or interpreted to mean that the Combined Group's earnings in
the first full year following the Effective Date, or in any subsequent period,
would necessarily match or be greater than or be less than those of AAM or
Dowlais for the relevant preceding financial period or any other period. For
the purposes of Rule 28 of the Code, the Quantified Financial Benefits
Statement contained in this Announcement is the responsibility of AAM and the
AAM Directors.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 p.m. (London time) on the tenth business day (as defined
in the Code) following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (London time) on the tenth business
day (as defined in the Code) following the Announcement in which any
securities exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 p.m. (London time) on the business day (as defined in the Code)
following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information
provided by Dowlais Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Dowlais may be
provided to AAM during the Offer Period as required under section 4 of
Appendix 4 to the Code to comply with Rule 2.11(c) of the Code.

Publication on a website and availability of hard copies

This Announcement and the documents required to be published pursuant to
Rule 26 of the Code will be available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on AAM's website at
www.aam.com/investors/offer-for-Dowlais-Group-plc
(https://www.aam.com/investors/offer-for-Dowlais-Group-plc) and on Dowlais'
website at www.dowlais.com (http://www.dowlais.com) promptly and in any event
by no later than 12 noon on the business day (as defined in the Code)
following the date of this Announcement. Neither the content of the websites
referred to in this Announcement nor the content of any website accessible
from hyperlinks in this Announcement is incorporated into, or forms part of,
this Announcement.

Dowlais Shareholders and persons with information rights may, subject to
applicable securities laws, request a hard copy of this Announcement (and any
information incorporated into it by reference to another source), free of
charge, by contacting Dowlais' registrars, Equiniti, by: (i) submitting a
request in writing to Equiniti at Aspect House, Spencer Road, Lancing, West
Sussex BN99 6DA, United Kingdom; or (ii) contacting Equiniti, between 8.30
a.m. and 5.30 p.m. (London time), Monday to Friday (excluding English and
Welsh public holidays) on +44 (0) 371 384 2030 (please use the country code
when calling from outside the UK). A person so entitled may, subject to
applicable securities laws, also request that all future documents,
announcements and information to be sent in relation to the Combination should
be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Code, AAM confirms that as at the date of
this Announcement, it has in issue and admitted to trading on the on the New
York Stock Exchange (NYSE:AXL) 117,581,028 shares of common stock of $0.01
each (excluding common stock held in treasury). The International Securities
Identification Number (ISIN) of the common stock is US0240611030.

In accordance with Rule 2.9 of the Code, Dowlais confirms that as at the date
of this Announcement, it has in issue and admitted to trading on the Main
Market of the London Stock Exchange 1,344,524,115 ordinary shares of 1 pence
each (excluding ordinary shares held in treasury). The International
Securities Identification Number (ISIN) of the ordinary shares is
GB00BMWRZ071.

General

If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.

Appendix 1

CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE COMBINATION

The Combination will be subject to the terms and conditions set out in this
Appendix 1 and in the Scheme Document.

Part 1

1.         Long Stop Date

The Combination will be conditional on the Scheme becoming unconditional and
becoming Effective, subject to the Code, by no later than 11.59 p.m. (London
time) on the Long Stop Date.

2.         Scheme approval

The Scheme will be subject to the following conditions:

(a)        (i)         its approval by a majority in number
representing not less than 75 per cent. in value of the Scheme Shareholders
who are on the register of members of Dowlais at the Voting Record Time (or
the relevant class or classes thereof, if applicable), in each case present,
entitled to vote and voting, either in person or by proxy, at the Court
Meeting or at any separate class meeting which may be required by the Court
(as applicable) or at any adjournment of any such meeting; and

(ii)        the Court Meeting and any separate class meeting which may
be required by the Court (or any adjournment of any such meeting) being held
on or before the 22nd day after the expected date of the Court Meeting to be
set out in the Scheme Document in due course (or such later date (a) as AAM
and Dowlais may agree or (b) (in a competitive situation) as may be specified
by AAM with the consent of the Panel, and in each case that, if so required,
the Court may allow);

(b)        (i)         the Resolutions being duly passed by the
requisite majority or majorities of Dowlais Shareholders at the General
Meeting (or any adjournment thereof); and

(ii)        the General Meeting being held on or before the 22nd day
after the expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date (a) as AAM and Dowlais may agree or
(b) (in a competitive situation) as may be specified by AAM with the consent
of the Panel, and in each case that, if so required, the Court may allow);

(c)        (i)         the sanction of the Scheme by the Court
(without modification or with modification on terms agreed by AAM and Dowlais)
and delivery of a copy of the Court Order to the Registrar of Companies in
England and Wales; and

(ii)        the Sanction Hearing being held on or before the 22nd day
after the expected date of the Sanction Hearing to be set out in the Scheme
Document in due course (or such later date (a) as AAM and Dowlais may agree or
(b) (in a competitive situation) as may be specified by AAM with the consent
of the Panel, and in each case that, if so required, the Court may allow).

In addition, AAM and Dowlais have agreed that, subject as stated in Part 2
below and to the requirements of the Panel the Combination will be conditional
on the following Conditions and, accordingly, the necessary actions to make
the Scheme Effective will not be taken unless the following Conditions (as
amended if appropriate) have been satisfied or, where relevant, waived:

3.         Official authorisations and regulatory clearances

Antitrust Approvals

EU

(a)        insofar as the Combination constitutes, or is deemed to
constitute, a concentration with a Community dimension within the scope of
Council Regulation (EC) 139/2004 (as amended) (the "EUMR"), one of the
following having occurred:

(i)         the European Commission (the "Commission") indicating that
the arrangement notified does not fall within the scope of the EUMR pursuant
to Article 6(1)(a) of the EUMR; or

(ii)        the Commission indicating that the concentration is
compatible with the internal market pursuant to Articles 6(1)(b), (including
in conjunction with Article 6(2)), 8(1) or 8(2) of the EUMR unconditionally or
on terms reasonably satisfactory to AAM, or having been deemed to have done so
pursuant to Article 10(6); or

(iii)       if the Commission makes a referral in whole or in part under
Article 4(4) or Article 9 of the EUMR, or is deemed to have made such a
reference, to a competent authority of one or more Member States whose laws
prohibit the parties from completing the Combination before clearance is
obtained under national merger control, such clearance being obtained (or
being deemed to be obtained) whether unconditionally or on terms reasonably
satisfactory to AAM from the competent authority or authorities of the
relevant Member State or States (and the Commission as applicable, where such
referral has been made in part), or any relevant waiting periods having
expired (provided that if the Commission makes a referral of the whole of the
concentration under Article 4(4) or Article 9 of the EUMR to the competent
authority or authorities of one or more Member States whose laws in each case
do not prohibit the parties from completing the Combination before clearance
is obtained under national merger control, this clause (iii) shall be deemed
to be satisfied),

(the "EU Antitrust Condition");

United Kingdom

(b)        insofar as the Combination constitutes, or is deemed to
constitute, a relevant merger situation within the meaning of Part 3 of the
Enterprise Act 2002 (the "EA") one of the following having occurred:

(i)         following submission of a CMA Briefing Paper to the
Competition and Markets Authority ("CMA") and with respect to the Combination:

(A)       the CMA's position as most recently communicated to the
parties being that it has no further questions in respect of the Combination;
and

(B)       as at the date on which all other Conditions are satisfied or
waived, the CMA not having: (I) requested submission of a Merger Notice; or
(II) given notice to either party that it is commencing a Phase 1
Investigation; or (III) indicated that the statutory review period in which
the CMA has to decide whether to make a reference under Section 34ZA of the EA
has begun; or (IV) requested documents or attendance by witnesses under
Section 109 of the EA, which may indicate it is considering commencing the
aforementioned review period in respect of the Combination; or

(ii)        where the CMA has commenced an investigation following the
submission of a CMA Briefing Paper or a Merger Notice, the CMA either:

(A)       having confirmed on terms reasonably satisfactory to AAM that
the Combination or any matter arising therefrom or related thereto will not be
subject to a Phase 2 reference under the EA or on any other statutory basis (a
"Phase 2 CMA Reference"), or the applicable time period for the CMA to make a
Phase 2 CMA Reference having expired without the CMA having made such a Phase
2 CMA Reference; or

(B)       in the event that a Phase 2 CMA Reference is made in relation
to the Combination, the CMA either:

I.          concluding in a report published in accordance with
Section 38 of the EA that neither the Combination nor any matter arising from
or relating to the Combination nor any part of it has or is expected to result
in a substantial lessening of competition within any market or markets in the
United Kingdom for goods or services; or

II.         allowing the Combination and any matter arising from or
relating to the Combination to proceed on terms reasonably satisfactory to
AAM,

(the "UK Antitrust Condition");

United States

(c)        insofar as the Combination constitutes, or is deemed to
constitute, a notifiable acquisition under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder, and any successor to such statute, rules, or
regulations (the "HSR Act"), the waiting period applicable to the consummation
of the Combination under the HSR Act having expired or terminated, and any
voluntary agreement between AAM and/or Dowlais and the U.S. Federal Trade
Commission or the U.S. Department of Justice pursuant to which AAM and/or
Dowlais has agreed not to consummate the Combination for any period of time
(such agreement being on terms reasonably satisfactory to AAM) is no longer in
effect (the "U.S. Antitrust Condition");

China

(d)        insofar as the Combination constitutes, or is deemed to
constitute, a notifiable concentration of undertakings within the meaning of
Article 25 of the Anti-Monopoly Law of the People's Republic of China (as
amended) and its implementing regulations (the "PRC AML"), and following
notification of the Combination to the China's State Administration for Market
Regulation ("SAMR"), SAMR issuing a formal notice approving the Combination
(unconditionally or on terms reasonably satisfactory to AAM) in order for AAM
to consummate the Combination (the "China Antitrust Condition");

             South Korea

(e)        insofar as the Combination constitutes, or is deemed to
constitute, a notifiable acquisition under the Monopoly Regulation and Fair
Trade Act of the Republic of Korea ("MRFTA"), the Korea Fair Trade Commission
("KFTC") having either: issued an approval notification pursuant to the MRFTA
that the Combination does not violate Article 9 paragraph 1 (Restriction on
Business Combination) of the MRFTA (as applicable); or if the KFTC issues an
examiner's report, issued a decision approving the Combination whether
unconditionally or subject to conditions reasonably satisfactory to AAM (the
"Korea Antitrust Condition");

Mexico

(f)        insofar as the Combination constitutes, or is deemed to
constitute a notifiable acquisition under the Mexican Federal Economic
Competition Law, the parties having received unconditional approval or
approval on terms reasonably satisfactory to AAM from the Mexican Federal
Economic Competition Commission (Comisión Federal de Competencia Económica)
("COFECE") or any authority that succeeds it under the applicable Mexican
Federal Economic Competition Law or any other applicable law regulating
competition that may be enacted having expired (the "Mexico Antitrust
Condition");

Brazil

(g)        insofar as the Combination constitutes or is deemed to
constitute a notifiable acquisition under Law No. 12,529 of 2011, either of
the following having occurred:

(i)         the Brazilian Antitrust Governmental Authority (Conselho
Administrativo de Defesa Econômica) ("CADE's") General Superintendence Office
issuing a decision approving or clearing the Combination without conditions or
on terms reasonably satisfactory to AAM and an additional mandatory fifteen
day waiting period following publication of the decision in the Federal
Official Gazette (Diário Oficial da União) having lapsed with no related
appeal by a third party or request for further review by any of CADE's
commissioners; or

(ii)        in the event that any appeal is filed, further review is
requested by CADE's Tribunal or CADE's General Superintendence Office does not
clear the Combination without conditions and refers the Combination to CADE's
tribunal, the publication of the final decision approving the Combination by
CADE's tribunal with or without any conditions, on terms reasonably
satisfactory to AAM, deemed unappealable at the administrative sphere, (the
"Brazil Antitrust Condition");

            Foreign Investment Approvals

France

(h)        insofar as the Combination constitutes or is deemed to
constitute a notifiable acquisition under Articles L. 151-3 and followings and
Articles R. 151-1 and followings of the French Monetary and Financial Code
(Code monétaire et financier) (the "French FDI Law"), one of the following
having occurred:

(i)         an expressed decision by the French Minister of the
Economy or any person belonging to the General Directorate of the Treasury
(Direction Générale du Trésor) officially empowered to deliver decisions
under Article L. 151-3 of the French Monetary and Financial Code in his name
and behalf (the "French FDI Authority") that the Combination does not fall
within the scope of the French FDI Law; or

(ii)        an expressed decision by the French FDI Authority, pursuant
to French FDI Law, that authorises the completion of the Combination
unconditionally or on terms reasonably satisfactory to AAM,

(the "France FDI Condition");

 

Germany

(i)         insofar as the Combination constitutes or is deemed to
constitute a notifiable acquisition by the German Federal Ministry for
Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und
Klimaschutz - "BMWK"), one of the following having occurred:

(i)         the BMWK issuing: (A) a clearance (Freigabe) pursuant to
Section 58a para. 1 sentence 1 or sec. 61 of the German Foreign Trade and
Payments Ordinance (Außenwirtschaftsverordnung) ("AWV") without conditions or
on terms reasonably satisfactory to AAM, or (B) a certificate of non-objection
(Unbedenklichkeitsbescheinigung) pursuant to Section 58 para. 1 sentence 1
AWV; or

(ii)        the BMWK having not issued a clearance, certificate of
non-objection or initiated a formal investigation for the Combination within
two months of receipt of an application for a clearance or a certificate of
non-objection; or within any applicable extension period pursuant to Sec.
14a(1) No. 1 of the German Foreign Trade and Payments Act
(Außenwirtschaftsgesetz) ("AWG"); or

(iii)       the BMWK having not prohibited (untersagt) the Combination
within the periods specified in Section 14a AWG; or

(iv)       the BMWK declaring in writing that the Combination can be
closed without having obtained prior approval from the BMWK.

(the "Germany FDI Condition");

            EU Foreign Subsidies Regulation

(j)         insofar as the Combination constitutes or is deemed to
constitute a notifiable acquisition under Regulation (EU) 2022/2560 of the
European Parliament and of the Council on foreign subsidies distorting the
internal market (the "EU FSR"), or the Commission requests such notification
under Article 21(5) of the EU FSR, any of the following having occurred:

(i)         the Commission declaring that the Combination does not
fall within the scope of the EU FSR; or

(ii)        the Commission either declaring that there are insufficient
indications to initiate an in-depth investigation and closing a preliminary
review pursuant to Article 10(4) of the EU FSR or not initiating an in-depth
investigation within the relevant period provided for in Article 24 of the EU
FSR; or

(iii)       the Commission not adopting a decision specified in Article
25(3) of the EU FSR within the time period specified in Article 25(4) of the
EU FSR, following an in-depth investigation; or

(iv)       following an in-depth investigation, the Commission either
issuing a no objection decision pursuant to Article 11(4) (in conjunction with
Article 25(3)(b)); or a decision on terms reasonably satisfactory to AAM
pursuant to Article 11(3) (in conjunction with Article 25(3)(a) of the EU
FSR).

(the "EU FSR Condition");

 

4.         AAM Shareholder approval

(a)        the approval by the affirmative vote of the holders of a
majority in voting power of the AAM Shares entitled to vote thereon at the AAM
Shareholder Meeting of the amendment to AAM's certificate of incorporation to
increase the number of authorised AAM Shares; and

(b)        the approval by the affirmative vote of the holders of a
majority in voting power present in person or by proxy at the AAM Shareholder
Meeting of the issuance of the New AAM Shares in connection with the
Combination;

5.         Listing on the New York Stock Exchange, effectiveness of
registration

(a)        confirmation having been received by AAM that the New AAM
Shares to be issued in connection with the Combination have been approved for
listing, subject to official notice of issuance, on the New York Stock
Exchange; and

(b)        in the event that the Combination is implemented by way of a
Takeover Offer, or otherwise absent an available exemption from the
registration requirements of the U.S. Securities Act, AAM's registration
statement having been declared effective by the SEC and no stop order having
been issued or proceedings for suspension of the effectiveness of AAM's
registration statement having been initiated by the SEC and AAM having
received all necessary U.S. state securities law or blue sky authorisations;

6.         General Third Party approvals

(a)        the waiver (or non-exercise within any applicable time
limits) by any Relevant Authority or any other body or person whatsoever in
any jurisdiction (each a "Third Party") of any termination right, right of
pre-emption, first refusal or similar right (which is material in the context
of the Wider Dowlais Group taken as a whole or in the context of the
Combination) arising as a result of or in connection with the Combination
including, without limitation, its implementation and financing or the
proposed direct or indirect Combination of any shares or other securities in,
or control or management of, Dowlais by AAM or any member of the Wider AAM
Group;

(b)        in addition to the competition law and regulatory approvals
referred to in Condition 3 (Official authorisations and regulatory clearances)
above, all necessary filings or applications having been made in connection
with the Combination and all statutory or regulatory obligations in any
jurisdiction having been complied with in connection with the Combination or
the Combination by any member of the Wider AAM Group following consultation
with Dowlais of any shares or other securities in, or control of, Dowlais and
all authorisations, orders, grants, recognitions, determinations,
confirmations, consents, licences, clearances, permissions, exemptions and
approvals reasonably deemed necessary or appropriate by AAM or any member of
the Wider AAM Group for or in respect of the Combination including without
limitation, its implementation and financing or the proposed direct or
indirect Combination of any shares or other securities in, or control of,
Dowlais or any member of the Wider Dowlais Group by any member of the Wider
AAM Group having been obtained in terms and in a form reasonably satisfactory
to AAM from all appropriate Third Parties or persons with whom any member of
the Wider Dowlais Group has entered into contractual arrangements and all such
authorisations, orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions and approvals deemed
necessary or appropriate to carry on the business of any member of the Wider
Dowlais Group which are material in the context of the AAM Group or the
Dowlais Group as a whole or for or in respect of the Combination, including
(without limitation) its implementation or financing remaining in full force
and effect and all filings necessary for such purpose having been made and
there being no notice or intimation of any intention to revoke or not to renew
any of the same at the time at which the Combination becomes otherwise
unconditional and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with; and

(c)        including in relation to the U.S. Antitrust Condition but
other than in relation to the other approvals referred to in Condition 3
(Official authorisations and regulatory clearances) above, no Third Party
(including for the avoidance of doubt the United States Federal Trade
Commission or the Antitrust Division of the United States Department of
Justice or any state Attorney General within the United States) having given
notice of a decision to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference (and, in each case, not
having withdrawn the same), or having enacted, made or proposed any statute,
regulation, decision or order, or change to published practice or having taken
any other steps, and there not continuing to be outstanding any statute,
regulation, decision, injunction or order, which in each case would reasonably
be expected to:

(i)         require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider AAM Group or any member of the Wider Dowlais Group of all
or any portion of their respective businesses, assets or property or impose
any limitation on the ability of any of them to conduct their respective
businesses (or any of them) or to own, control or manage any of their
respective assets or properties or any part thereof which, in any such case,
is material in the context of the Wider AAM Group or the Wider Dowlais Group
in either case taken as a whole;

(ii)        require, prevent or materially delay, or alter the terms
envisaged for, any proposed divestiture by any member of the Wider AAM Group
of any shares or other securities in Dowlais;

(iii)       impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider AAM Group directly or
indirectly to acquire or to hold or to exercise effectively all or any rights
of ownership in respect of shares or loans or securities convertible into
shares or any other securities (or the equivalent) in any member of the Wider
Dowlais Group or the Wider AAM Group or to exercise voting or management
control over any such member;

(iv)       save as Disclosed, materially adversely limit the ability of
any member of the Wider AAM Group or of the Wider Dowlais Group to conduct,
integrate or co-ordinate its business, or any part of it, with the businesses
or any part of the businesses of any member of the Wider AAM Group or of the
Wider Dowlais Group in a manner which is materially adverse in the context of
the Wider AAM Group or Wider Dowlais Group, in either case taken as a whole;

(v)        otherwise materially adversely affect the business, assets,
profits or prospects of any member of the Wider AAM Group or of any member of
the Wider Dowlais Group to an extent which is material in the context of the
Wider AAM Group or the Wider Dowlais Group in either case taken as a whole or
in the context of the Combination;

(vi)       make the Combination or its implementation by AAM or any
member of the Wider AAM Group of any shares or other securities in, or control
of, Dowlais void, illegal, and/or unenforceable under the laws of any
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, materially delay or otherwise interfere with the same, or impose
material additional conditions or obligations with respect thereto;

(vii)      require (save as envisaged by the Combination or sections 974
to 991 (inclusive) of the Companies Act) any member of the Wider AAM Group or
the Wider Dowlais Group to offer to acquire any shares or other securities (or
the equivalent) or interest in any member of the Wider Dowlais Group or the
Wider AAM Group owned by any Third Party, in each case to an extent which is
material in the context of the Wider AAM Group or the Wider Dowlais Group in
either case taken as a whole or in the context of the Combination; or

(viii)     result in any member of the Wider Dowlais Group ceasing to be
able to carry on business under any name under which it presently does so, to
an extent which is material in the context of the Wider Dowlais Group taken as
a whole,

and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Combination or the Combination or proposed Combination of any Dowlais Shares
having expired, lapsed or been terminated;

7.         Certain matters arising as a result of any arrangement,
agreement etc.

save as Disclosed, there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the Wider Dowlais
Group is a party or by or to which any such member or any of its assets are or
may be bound, entitled or subject, or any circumstance which, in each case as
a consequence of the Combination of any shares or other securities (or
equivalent) in Dowlais or because of a change in the control or management of
Dowlais or otherwise, would reasonably be expected to result in any of the
following to an extent which is material and adverse in the context of the
Wider Dowlais Group taken as a whole or in the context of the Combination:

(a)        any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any such member,
being or becoming repayable or capable of being declared repayable immediately
or earlier than their or its stated maturity date or repayment date or the
ability of any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being withdrawn or
inhibited;

(b)        any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
onerous obligation or liability arising or any adverse action being taken or
arising thereunder;

(c)        any assets or interests of any such member being or failing
to be disposed of or charged or ceasing to be available to any such member or
any right arising under which any such asset or interest would reasonably be
expected to be required to be disposed of or charged or could reasonably be
expected to cease to be available to any such member otherwise than in the
ordinary course of business;

(d)        save in the ordinary and usual course of business, the
creation or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property, assets or interest of
any such member or any such mortgage, charge or other security interest
(whenever arising or having arisen) becoming enforceable;

(e)        the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;

(f)        the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;

(g)        any such member ceasing to be able to carry on business
under any name under which it presently does so;

(h)        the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material authorisation, order, grant,
recognition, determination, confirmation, consent, licence, clearance,
permission, exemption, approval, notice, waiver, concession, agreement or
exemption from any Third Party or any person) other than trade creditors or
other liabilities incurred in the ordinary course of business or in connection
with the Combination; or

(i)         any requirement on any such member to acquire, subscribe,
pay up or repay any shares or other securities (or the equivalent),

and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Dowlais Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, would reasonably be expected to
result in any of the events or circumstances as are referred to in paragraphs
(a) to (i) of this Condition 7, in each case to an extent which is material
and adverse in the context of the Wider Dowlais Group taken as a whole;

8.         Certain events occurring since Last Accounts Date

save as Disclosed, no member of the Wider Dowlais Group having, since the Last
Accounts Date:

(a)        save as between Dowlais and wholly owned subsidiaries of
Dowlais or for Dowlais Shares issued under or pursuant to the exercise of
options and vesting of awards granted under the Dowlais Share Plans in the
ordinary course, issued or agreed to issue, authorised or proposed the issue
of additional shares of any class;

(b)        save as between Dowlais and wholly owned subsidiaries of
Dowlais for the grant of options and awards and other rights under the Scheme
Shares in the ordinary course, issued, or agreed to issue, authorised or
proposed the issue of securities convertible into shares of any class or
rights, warrants or options to subscribe for, or acquire, any such shares or
convertible securities;

(c)        other than to another member of the Wider Dowlais Group,
sold (or agreed to transfer or sell) any shares held in treasury;

(d)        other than to another member of the Dowlais Group, prior to
the Effective Date, recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus issue, dividend or other
distribution whether payable in cash or otherwise, other than the FY24 Final
Dividend or any repurchases of Dowlais Shares by Dowlais pursuant to the
Buyback Programme;

(e)        save for intra-Dowlais Group transactions, authorised,
implemented or announced any merger or demerger with any body corporate or
acquired or disposed of or transferred, mortgaged or charged or created any
security interest over any assets or any right, title or interest in any asset
(including shares and trade investments) or authorised or proposed or
announced any intention to propose any merger, demerger, acquisition or
disposal, transfer, mortgage, charge or security interest, in each case, other
than in the ordinary course of business and, in each case, to the extent which
is material in the context of the Wider Dowlais Group taken as a whole or in
the context of the Combination;

(f)        save for intra-Dowlais Group transactions, made or
authorised or proposed or announced an intention to propose any material
change in its loan capital, to the extent which is material in the context of
the Wider Dowlais Group taken as a whole;

(g)        issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for intra-Dowlais Group transactions
or save in the ordinary course of business), incurred or increased any
indebtedness or become subject to any liability (actual or contingent) to an
extent which, in each case, is material in the context of the Wider Dowlais
Group taken as a whole;

(h)        other than the FY24 Final Dividend or any repurchases of
Dowlais Shares by Dowlais pursuant to the Buyback Programme, purchased,
redeemed or repaid or announced any proposal to purchase, redeem or repay any
of its own shares or other securities or reduced or, save in respect of the
matters mentioned in paragraph (a) or (b) of this Condition 8 above, made any
other change to any part of its share capital, in each case, to the extent
which is material in the context of the Wider Dowlais Group taken as a whole
or in the context of the Combination;

(i)         other than pursuant to the Combination and except for
intra-Dowlais Group transactions, implemented, or authorised, proposed or
announced its intention to implement, any reconstruction, merger, demerger,
amalgamation, scheme, commitment or other transaction or arrangement otherwise
than in the ordinary course of business, in each case to an extent which is
material in the context of the Wider Dowlais Group taken as a whole;

(j)         been unable or deemed unable, or admitted in writing that
it is unable, to pay its debts as they fall due or having stopped or suspended
(or threatened to stop or suspend) payment of its debts generally or ceased or
threatened to cease carrying on all or a substantial part of its business;

(k)        (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or steps or had any
legal proceedings started or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the appointment
of a receiver, administrative receiver, administrator, manager, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed, to the extent which is material
in the context of the Wider Dowlais Group taken as a whole;

(l)         commenced negotiations with any of its creditors or taken
any step with a view to rescheduling or restructuring any of its indebtedness
or entered into a composition, compromise, assignment or arrangement with any
of its creditors whether by way of a voluntary arrangement, scheme of
arrangement, deed of compromise or otherwise, to the extent to which is
material in the context of the Wider Dowlais Group taken as a whole;

(m)       waived, settled or compromised any claim (otherwise than in
the ordinary course of business), which is material in the context of the
Wider Dowlais Group taken as a whole or in the context of the Combination;

(n)        entered into, varied or authorised any material agreement,
transaction, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which:

(i)         is of a long-term, onerous or unusual nature or magnitude
or which is reasonably likely to involve an obligation of such nature or
magnitude (save in the ordinary course of business); or

(ii)        is likely to materially restrict the business of any member
of the Wider Dowlais Group other than of a nature and to an extent which is
normal in the context of the business concerned,

and, in either case, which is or would reasonably be expected to be material
and adverse in the context of the Wider Dowlais Group taken as a whole or in
the context of the Combination;

(o)        entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or proposed to, effect any of the
transactions, matters or events referred to in this Condition 8;

(p)        made any material alteration to its constitutional
documents;

(q)        except in relation to changes made or agreed as a result of,
or arising from, law or changes to law, made or agreed or consented to any
change to:

(i)         the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider Dowlais Group for its
directors or employees or their dependents;

(ii)        the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;

(iii)       the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or

(iv)       the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made,

in each case, which has an effect that is material in the context of the Wider
Dowlais Group taken as a whole or in the context of the Combination;

(r)        proposed, agreed to provide or modified the terms of any of
the Dowlais Share Plans or other benefit constituting a material change
relating to the employment or termination of employment of a material category
of persons employed by the Wider Dowlais Group or which constitutes a material
change to the terms or conditions of employment of any senior employee of the
Wider Dowlais Group, save as agreed by the Panel (if required) and by AAM;

(s)        other than with the consent of AAM, taken (or agreed or
proposed to take) any action which requires, or would require, the consent of
the Panel or the approval of Dowlais Shareholders in a general meeting in
accordance with, or as contemplated by, Rule 21.1 of the Code; or

(t)         save to the extent arising as a result of any change in
applicable law, entered into or varied in a material way the terms of, any
contract, agreement or arrangement with any of the directors or senior
executives of any member of the Wider Dowlais Group (save for salary
increases, bonuses or variations of terms in the ordinary course), other than
as agreed by AAM and (if required) by the Panel;

9.         No adverse change, litigation or regulatory enquiry

save as Disclosed, since the Last Accounts Date:

(a)        no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider Dowlais Group which, in any
such case, is material in the context of the Wider Dowlais Group taken as a
whole or in the context of the Combination and no circumstances have arisen
which would or would reasonably be expected to result in such adverse change
or deterioration;

(b)        no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider Dowlais Group is or may
become a party (whether as a plaintiff, defendant or otherwise) and no
enquiry, review or investigation by, or complaint or reference to, any Third
Party or other investigative body against or in respect of any member of the
Wider Dowlais Group having been instituted, announced, implemented or
threatened by or against or remaining outstanding in respect of any member of
the Wider Dowlais Group which in any such case which has had or would
reasonably be expected to have a material adverse effect on the Wider Dowlais
Group taken as a whole or in the context of the Combination;

(c)        no contingent or other liability of any member of the Wider
Dowlais Group having arisen or become apparent to AAM or increased which has
had or would reasonably be expected to have a material adverse effect on the
Wider Dowlais Group, taken as a whole or in the context of the Combination;

(d)        no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented, instituted
by or remaining outstanding against or in respect of any member by or the
Wider Dowlais Group which in any case is material in the context of the Wider
Dowlais Group taken as a whole;

(e)        no member of the Wider Dowlais Group having conducted its
business in breach of any applicable laws and regulations which in any case is
material in the context of the Wider Dowlais Group taken as a whole or in the
context of the Combination; and

(f)        no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or materially adverse modification of
any licence or permit held by any member of the Wider Dowlais Group which is
necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or materially adverse modification of which has had,
or would reasonably be expected to have, an adverse effect which is material
in the context of the Wider Dowlais Group taken as a whole or in the context
of the Combination;

10.       No discovery of certain matters

(a)        save as Disclosed, AAM not having discovered:

(i)         that any financial, business or other information
concerning the Wider Dowlais Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider Dowlais Group
is materially misleading, contains a material misrepresentation of fact or
omits to state a fact necessary to make that information not materially
misleading and which was not subsequently corrected before the date of this
Announcement by disclosure either publicly or otherwise to AAM or its
professional advisers, in each case, to the extent which is material in the
context of the Wider Dowlais Group taken as a whole or in the context of the
Combination; or

(ii)        that any member of the Wider Dowlais Group or partnership,
company or other entity in which any member of the Wider Dowlais Group has a
significant economic interest and which is not a subsidiary undertaking of
Dowlais, is subject to any liability (actual or contingent) which is not
disclosed in the annual report and accounts of Dowlais for the Last Accounts
Date, in each case, to the extent which is material in the context of the
Wider Dowlais Group taken as a whole or in the context of the Combination;

(b)        save as Disclosed, AAM not having discovered that:

(i)         any past or present member of the Wider Dowlais Group has
failed to comply with any and/or all applicable legislation or regulation, of
any jurisdiction with regard to the use, treatment, handling, storage,
carriage, disposal, spillage, release, discharge, leak or emission of any
waste or hazardous substance or any substance likely to impair the environment
or harm human health or animal health or otherwise relating to environmental
matters or the health and safety of humans, or that there has otherwise been
any such use, treatment, handling, storage, carriage, disposal, spillage,
release, discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation or regulations, and
wherever the same may have taken place) any of which storage, carriage,
disposal, spillage, release, discharge, leak or emission would be likely to
give rise to any material liability (actual or contingent) or cost on the part
of any member of the Wider Dowlais Group and which is material in the context
of the Wider Dowlais Group taken as a whole or in the context of the
Combination;

(ii)        there is, or is likely to be, for any reason whatsoever,
any liability (actual or contingent) of any past or present member of the
Wider Dowlais Group to make good, remediate, repair, reinstate or clean up any
property or any controlled waters now or previously owned, occupied, operated
or made use of or controlled by any such past or present member of the Wider
Dowlais Group (or on its behalf) or by any person for which a member of the
Wider Dowlais Group is or has been responsible, or in which any such member
may have or previously have had or be deemed to have had an interest, under
any environmental legislation, regulation, notice, circular or order of any
Third Party and which is material in the context of the Wider Dowlais Group
taken as a whole or in the context of the Combination;

(iii)       circumstances exist (whether as a result of the making of
the Combination or otherwise) which would be reasonably likely to lead to any
Third Party instituting, or whereby any member of the Wider AAM Group or any
present or past member of the Wider Dowlais Group would be likely to be
required to institute, an environmental audit or take any other steps which
would in any such case be reasonably likely to result in any liability
(whether actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes currently
carried out or make good, remediate, repair, re-instate or clean up any land
or other asset currently or previously owned, occupied or made use of by any
past or present member of the Wider Dowlais Group (or on its behalf) or by any
person for which a member of the Wider Dowlais Group is or has been
responsible, or in which any such member may have or previously have had or be
deemed to have had an interest which is material in the context of the Wider
Dowlais Group taken as a whole or in the context of the Combination; or

(iv)       circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider
Dowlais Group which claim or claims would be likely, materially and adversely,
to affect any member of the Wider Dowlais Group and which is material in the
context of the Wider Dowlais Group taken as a whole or in the context of the
Combination; and

11.       Anti-corruption, economic sanctions, criminal property and
money laundering

save as Disclosed and save as is not material in each case in the context of
the Wider Dowlais Group taken as a whole or in the context of the Combination,
AAM not having discovered that:

(a)        (i) any past or present member, director, officer or
employee of the Wider Dowlais Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence under the
Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation or any
other applicable law, rule or regulation concerning improper payments or
kickbacks; or (ii) any person that performs or has performed services for or
on behalf of the Wider Dowlais Group is or has at any time engaged in any
activity, practice or conduct in connection with the performance of such
services which would constitute an offence under the Bribery Act 2010, the
U.S. Foreign Corrupt Practices Act of 1977 or any other applicable
anti-corruption or anti-bribery law, rule or regulation or any other
applicable law, rule or regulation concerning improper payments or kickbacks;

(b)        any asset of any member of the Wider Dowlais Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds
of crime under any other applicable law, rule or regulation concerning money
laundering or proceeds of crime or any member of the Wider Dowlais Group is
found to have engaged in activities constituting money laundering under any
applicable law, rule or regulation concerning money laundering;

(c)        any past or present member, director, officer or employee of
the Dowlais Group, or any other person for whom any such person may be liable
or responsible, is or has engaged in any conduct which would violate
applicable economic sanctions or dealt with, made any investments in, made any
funds or assets available to or received any funds or assets from:

(i)         any government, entity or individual in respect of which
U.S., UK or European Union persons, or persons operating in those territories,
are prohibited from engaging in activities or doing business, or from
receiving or making available funds or economic resources, by U.S., UK or
European Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control, or HMRC;
or

(ii)        any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the U.S., the UK or the European
Union or any of its member states, except as may have been licensed by the
relevant authority;

(d)        any past or present member, director, officer or employee of
the Wider Dowlais Group, or any other person for whom any such person may be
liable or responsible:

(i)         has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act;

(ii)        has engaged in conduct which would violate any relevant
anti-boycott law, rule or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State;

(iii)       has engaged in conduct which would violate any relevant
laws, rules, or regulations concerning human rights, including but not limited
to any law, rule or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour; or

(iv)       is debarred or otherwise rendered ineligible to bid for or to
perform contracts for or with any Relevant Authority or found to have violated
any applicable law, rule or regulation concerning government contracting or
public procurement; or

(e)        any member of the Wider Dowlais Group is or has been engaged
in any transaction which would cause AAM to be in breach of any law or
regulation upon its Combination of Dowlais, including but not limited to the
economic sanctions of the United States Office of Foreign Assets Control, or
HMRC or any other Relevant Authority.

Part 2

Waiver and invocation of the Conditions

1.         Subject to the requirements of the Panel in accordance with
the Code, AAM reserves the right in its sole discretion to waive, in whole or
in part, all or any of the Conditions in Part 1 of this Appendix 1, except for
Conditions 1 (Long Stop Date), 2(a)(i), 2(b)(i) and 2(c)(i) (Scheme approval),
4 (AAM Shareholder approval), 5(a) and 5(b) (Listing on the New York Stock
Exchange, effectiveness of registration), which cannot be waived. The
deadlines in any of Conditions 2(a)(ii), 2(b)(ii) and 2(c)(ii) (Scheme
approval) may be extended to such later date as AAM may determine (with the
Panel's consent and approval of the Court, if such consent and/or approval is
required). If any of Conditions 1 (Long Stop Date), 2(a)(ii), 2(b)(ii) and
2(c)(ii) (Scheme approval) is not satisfied by the relevant deadline specified
in the relevant Condition, AAM shall make an announcement by 8.00 a.m. (London
time) on the business day (as defined in the Code) following such deadline
confirming whether, subject to paragraph 3 below, it has invoked the relevant
Condition, waived the relevant deadline or extended the relevant deadline.

2.         Conditions 2(a)(i), 2(b)(i) (Scheme approval) and 3
(Official authorisations and regulatory clearances) to 11 (Anti-corruption,
economic sanctions, criminal property and money laundering) (inclusive) must
be fulfilled, determined by AAM to remain fulfilled or (if capable of waiver)
waived, by no later than 11.59 p.m. (London time) on the day before the
Sanction Hearing. AAM shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as satisfied any
of Conditions 2(a)(i), 2(b)(i) (Scheme approval) or 3 (Official authorisations
and regulatory clearances) to 11 (Anti-corruption, economic sanctions,
criminal property and money laundering) (inclusive) by a date or time earlier
than the latest date and time specified above for the fulfilment of the
relevant Condition notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any of such Conditions may not be
capable of fulfilment.

3.         Subject to paragraph 4 below, under Rule 13.5(a) of the
Code, AAM may only invoke a Condition so as to cause the Combination not to
proceed, to lapse or to be withdrawn with the consent of the Panel. The Panel
will normally only give its consent if the circumstances which give rise to
the right to invoke the Condition are of material significance to AAM in the
context of the Combination. This will be judged by reference to the facts of
each case at the time that the relevant circumstances arise.

4.         Each of Conditions 1 (Long Stop Date), 2 (Scheme approval),
4 (AAM Shareholder approval) and 5 (Listing on the New York Stock Exchange,
effectiveness of registration) (and any Takeover Offer acceptance condition
adopted on the basis specified in Part 3 of this Appendix 1) will not be
subject to Rule 13.5(a) of the Code.

5.         Any Condition that is subject to Rule 13.5(a) of the Code
may be waived by AAM.

6.         The Combination will not become Effective unless the
Conditions have been fulfilled or (to the extent capable of waiver and
permitted) waived or, where appropriate, have been determined by AAM to be or
remain satisfied by no later than the Long Stop Date.

7.         Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.

 

Part 3

IMPLEMENTATION BY WAY OF TAKEOVER OFFER

Subject to the terms of the Co-operation Agreement and obtaining the consent
of the Panel, AAM reserves the right to elect to implement the Combination by
way of a Takeover Offer as an alternative to the Scheme. In such event, such
Takeover Offer will be implemented on the same terms and conditions, so far as
applicable, as those which would apply to the Scheme subject to appropriate
amendments to reflect the change in method of effecting the Combination,
including (without limitation) the inclusion of an acceptance condition set at
90 per cent. of Dowlais Shares to which the Takeover Offer relates, (or such
lesser percentage as may be determined after consultation with the Panel (if
necessary)), being in any case more than 50 per cent. of the voting rights
normally exercisable at a general meeting of Dowlais, including, for this
purpose, any such voting rights attaching to Dowlais Shares that are issued
before the Takeover Offer becomes or is declared unconditional (whether
pursuant to the exercise of any outstanding subscription or conversion rights
or otherwise).

 

Part 4

CERTAIN FURTHER TERMS OF THE COMBINATION

1.         The availability of the Combination to persons not resident
in the UK may be affected by the laws of the relevant jurisdiction. Persons
who are not resident in the UK should inform themselves about, and observe,
any applicable requirements. Dowlais Shareholders who are in any doubt about
such matters should consult an appropriate independent professional adviser in
the relevant jurisdiction without delay and observe any applicable
requirements. Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.

2.         Dowlais Shares will be acquired by AAM fully paid and free
from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights or interests whatsoever and
together with all rights existing at the date of this Announcement or
thereafter attaching or accruing thereto, including (without limitation) the
right to receive and retain, in full, all dividends and other distributions
(if any) declared, made or paid or any other return of capital (whether by way
of reduction of share capital, repurchase or redemption or otherwise) made on
or after the date of this Announcement in respect of Dowlais Shares, other
than the FY24 Final Dividend or any repurchases of Dowlais Shares by Dowlais
pursuant to the Buyback Programme.

3.         Fractions of New AAM Shares will not be allotted to Dowlais
Shareholders. Instead, all fractional shares which a holder of Dowlais Shares
would otherwise be entitled to receive will be aggregated and calculations
will be rounded down, and such holder shall receive, in lieu of such
fractional entitlements, cash in an amount (rounded down to the nearest penny)
equal to such fractional amount multiplied by the last reported sale price of
AAM Shares on the New York Stock Exchange (as reported in Bloomberg or, if not
reported therein, in another authoritative source selected by AAM) on the last
Business Day prior to the Effective Date.

4.         If any dividend, other distribution or return of capital,
other than the FY24 Final Dividend or any repurchases of Dowlais Shares by
Dowlais pursuant to the Buyback Programme, is announced, declared, made,
payable or paid in respect of Dowlais Shares on or after the date of this
Announcement and before the Effective Date, AAM reserves the right to reduce
the cash element of the consideration payable in respect of each Dowlais Share
by the amount of all or part of any such dividend, other distribution or
return of capital, in which case any reference in this Announcement to the
consideration payable under the terms of the Combination will be deemed to be
a reference to the consideration as so reduced. If AAM exercises this right or
makes such a reduction in respect of a dividend, other distribution or return
of capital, Dowlais Shareholders will be entitled to receive and retain that
dividend, other distribution or return of capital. Any exercise by AAM of its
rights referred to in this paragraph 4 shall be the subject of an announcement
and, for the avoidance of doubt, shall not be regarded as constituting any
revision or variation of the Combination.

5.         This Announcement and any rights or liabilities arising
hereunder, the Combination, the Scheme and the Forms of Proxy will be governed
by the laws of England and Wales and be subject to the jurisdiction of the
courts of England and Wales. The Combination will also be subject to the
Conditions and further terms set out in this Announcement and to be set out in
the Scheme Document and such further terms as may be required to comply with
the UK Listing Rules and the provisions of the Code. The Combination and the
Scheme will comply with the applicable requirements of the FCA, the London
Stock Exchange and the Court, as well as with the Panel and the Code. This
Announcement does not constitute, or form part of, an offer or invitation to
purchase Dowlais Shares or any other securities.

6.         If AAM is required by the Panel to make an offer for
Dowlais Shares under a mandatory offer for Dowlais under Rule 9 of the Code,
AAM may make such alterations to the above Conditions as are necessary to
comply with Rule 9 of the Code.

7.         The New AAM Shares will be validly issued, fully paid and
non-assessable. The New AAM Shares will be issued free from all liens,
equitable interests, charges, encumbrances, rights of pre-emption and any
other third party rights or interests whatsoever.

8.         The consideration payable for the Combination (including,
for the avoidance of doubt, the New AAM Shares and any cash) will be paid or
delivered subject to any deduction or withholding on account of tax that is
required by applicable law in any relevant jurisdiction.

Appendix 2

SOURCES AND BASES OF INFORMATION

Unless otherwise stated in this Announcement:

1.         As at close of business on 28 January 2025 (being the last
Business Day before the date of this Announcement) Dowlais had 1,344,524,115
ordinary shares in issue.

2.         Dowlais does not hold any shares in treasury.

3.         Except for the purpose of paragraph 21 and the undertaking
therein, any reference to the entire issued and to be issued ordinary share
capital of Dowlais is based on:

(a)        1,344,524,115 Dowlais Shares referred to in paragraph 1
above (which includes 5,523,071 Dowlais Shares held by the employee benefit
trust operated by Dowlais that can be used to satisfy the vesting of awards
under the Dowlais Share Plans as at close of business on 28 January 2025
(being the last Business Day before the date of this Announcement)); and

(b)        19,021,961 Dowlais Shares which may be issued on or after
the date of this Announcement on the vesting of awards under the Dowlais Share
Plans.

4.         The implied enterprise value multiple for Dowlais of
approximately 4.1 times adjusted EBITDA for the twelve-month period ending 31
December 2023 is calculated by reference to:

(a)        the implied value (excluding the FY2024 Final Dividend) of
82.4 pence per Dowlais Share multiplied by the issued and to be issued
ordinary share capital of Dowlais referenced in paragraph 3 above; plus

(b)        the following balance sheet items taken as of 30 June 2024:
net financial debt excluding lease liabilities of £915 million, lease
liabilities of £142 million, non-controlling interests of £34 million,
tax-adjusted pension liabilities of £338 million; together divided by;

(c)        Dowlais' adjusted EBITDA of £618 million for the 12-month
period ending 31 December 2023.

5.         The volume-weighted average prices of a Dowlais Share are
derived from data provided by Bloomberg.

6.         Pro-forma revenue and adjusted EBITDA margin have been
compiled on a statutory basis and without adjustments for differences between
US GAAP and IFRS.

7.         Unless otherwise stated, all prices for Dowlais Shares have
been derived from data provided by Bloomberg and represent Closing Prices on
the relevant date(s).

8.         Unless otherwise stated:

(a)        the balance sheet information relating to Dowlais is
extracted from the first half 2024 results of Dowlais as at 30 June 2024; and

(b)        the income statement financial information relating to
Dowlais is extracted from the Annual Report and Financial Statements of
Dowlais for the year ended 31 December 2023.

9.         Certain figures included in this Announcement have been
subject to rounding adjustments.

Appendix 3

DETAILS OF IRREVOCABLE UNDERTAKINGS

1.         Dowlais Directors

The following Dowlais Directors have given irrevocable undertakings in respect
of their own beneficial holdings of Dowlais Shares (or those Dowlais Shares
over which they have control) to vote (or procure a vote) in favour of the
resolutions relating to the Combination at the Dowlais Meetings or, in the
event that the Transaction is implemented by way of a Takeover Offer, to
accept (or procure the acceptance of) such Takeover Offer:

 

 Name                   Total Number of  Percentage of issued ordinary share capital (%)

Dowlais Shares
 Liam Butterworth       2,331,984        0.173%
 Roberto Fioroni        1,153,116        0.086%
 Simon Mackenzie Smith  163,392          0.012%
 Celia Baxter           119,421          0.009%
 Philip Harrison        60,119           0.004%
 Shali Vasudeva         24,215           0.002%
 Fiona MacAulay         12,182           0.001%

The obligations of the Dowlais Directors under the irrevocable undertakings
given by them shall lapse and cease to have effect on and from the earlier of
the following occurrences:

(a)        AAM publicly announces, with the consent of the Panel, that
it does not intend to proceed with the Combination;

(b)        the Combination lapses, is withdrawn or otherwise terminates
in accordance with its terms;

(c)        the Scheme has not become Effective before 11.59 p.m. on the
Long Stop Date; or

(d)        if any competing offer for Dowlais is declared wholly
unconditional or becomes effective.

These irrevocable undertakings remain binding in the event a competing offer
is made for Dowlais. These irrevocable undertakings also extend to any shares
acquired by the Dowlais Directors as a result of the vesting of awards under
the Dowlais Share Plans.

Appendix 4

AAM FY24 Profit Estimate

1.         AAM FY24 Profit Estimate

For full year 2024:

·    AAM is estimating sales in the range of $6.10 - $6.15 billion.

·    AAM is estimating Adjusted EBITDA in the range of $740 - $750
million.

·    AAM is estimating Adjusted free cash flow in the range of $220 - $230
million.

Supplementary data for GAAP reconciliation:

Adjusted EBITDA

·    AAM is estimating net income in the range of $30 - $35 million.

·    AAM is estimating interest expense in the range of $185 - $185
million.

·    AAM is estimating income tax expense in the range of $25 - $30
million.

·    AAM is estimating depreciation and amortization in the range of $470
- $470 million.

·    AAM is estimating full year 2024 EBITDA in the range of $710 - $720
million.

·    AAM is estimating restructuring, acquisition, and other related costs
(principally impairment charge) in the range of $30 - $30 million.

·    AAM is estimating full year 2024 Adjusted EBITDA in the range of $740
- $750 million.

Adjusted Free Cash Flow

·    AAM is estimating net cash provided by operating activities in the
range of $440 - $450 million.

·    AAM is estimating capital expenditures net of proceeds from the sale
of property, plant and equipment and from government grants in the range of
($240) - ($240) million.

·    AAM is estimating full year 2024 free cash flow in the range of $200
- $210 million.

·    AAM is estimating cash payments for restructuring and
acquisition-related costs in the range of $20 - $20 million.

·    AAM is estimating full year 2024 Adjusted free cash flow in the range
of $220 - $230 million.

2.         Application of Rule 28 to AAM FY24 Profit Estimate

The statements above in relation to Adjusted EBITDA and Adjusted free cash
flow constitute profit estimates for the purposes of the Code.

The Panel has granted AAM a dispensation from the requirement to include
reports from reporting accountants and AAM's financial advisers in relation to
the FY24 Profit Estimate on the basis that:(i) the estimate is presented in a
manner which is consistent with AAM's ordinary course quarterly guidance; (ii)
Dowlais has agreed to the dispensation; and (iii) the directors of AAM have
provided the confirmations stated below.

3.         AAM Directors' confirmation

The AAM Directors confirm that, as at the date of this Announcement, the AAM
FY24 Profit Estimate is valid as at the date of this announcement and has been
properly compiled on the basis of the assumptions stated below and that that
the basis of accounting used is consistent with AAM's accounting policies.

4.         Basis of preparation

The AAM 2024 Profit Estimate is based on AAM's unaudited management accounts
for the year ended 31 December 2024. The basis of accounting used for the AAM
2024 Profit Estimate is consistent with the AAM's existing accounting
policies, which: (i) are in accordance with U.S. GAAP; (ii) were applied in
the preparation of the AAM's financial statements for the year ending 31
December 2023; and (iii) are expected to be applied in the preparation of the
AAM financial statements for the period up to 31 December 2025.

The AAM 2024 Profit Estimate has been prepared on the basis referred to above
and subject to the principal assumptions set out below. The AAM 2024 Profit
Estimate is inherently uncertain and there can be no guarantee that any of the
factors referred to under "Principal Assumptions" below will not occur and/or,
if they do, their effect on AAM's results of operations, financial condition,
or financial performance, may be material. The AAM 2024 Profit Estimate should
therefore be read in this context and construed accordingly.

5.         Principal assumptions

(a)        Factors outside the influence or control of the AAM
Directors:

(i)         there will be no material change to macroeconomic,
political, inflationary, regulatory or legal conditions in the markets or
regions in which AAM operates;

(ii)        there will be no material change in current US interest
rates, economic growth (GDP), inflation expectations or foreign exchange rates
compared with AAM's estimates;

(iii)       there will be no material change in accounting standards;

(iv)       there will be no material change in market conditions in
relation to customer demand or the competitive environment;

(v)        there will be no material litigation or regulatory
investigations, or material unexpected developments in any existing litigation
or regulatory investigation, in relation to any of AAM's operations, products
or services; and

(vi)       there will be no business disruptions that materially affect
AAM, its customers, operations, supply chain or labour supply, including
natural disasters, acts of terrorism, cyber-attack and/or technological
issues.

(b)        Factors within the influence or control of the AAM
Directors:

(i)         there will be no material acquisitions, disposals,
distribution partnerships, joint ventures or other commercial agreements,
other than those already assumed within the forecast;

(ii)        there will be no material change in the existing
operational strategy of AAM;

(iii)       there will be no material changes in AAM's accounting
policies and/or the application thereof;

(iv)       there are no material strategic investments or capital
expenditure in addition to those already planned; and

(v)        there will be no material change in the management or
control of AAM.

 

 

 

 

 

Appendix 5

Dowlais FY24 Profit Estimate

1.         Dowlais FY24 Profit Estimate

On 13 August 2024, Dowlais announced its half year results for the financial
year ended 31 December 2024. Included within these results was the following
statement: "Consequently, we expect a mid to high single-digit adjusted
revenue decline for 2024 and an adjusted operating margin between 6.0% and
7.0% at constant currency, given the benefits of commercial recoveries,
restructuring savings and performance initiatives" (the "Dowlais FY24 Profit
Estimate"). The Dowlais FY24 Profit Estimate was reconfirmed in the trading
update released by Dowlais in November 2024.

The Dowlais FY24 Profit Estimate constitutes a profit estimate for the
purposes of Rule 28.1(c) of the Code.

2.         Dowlais Directors' confirmation

The Dowlais Directors confirm that, as at the date of this Announcement, the
Dowlais FY24 Profit Estimate remains valid and that it has been properly
compiled on the basis of the assumptions stated and that the basis of
accounting used is consistent with the accounting policies of the Dowlais
Group, which are in accordance with UK-endorsed International Financial
Reporting Standards ("IFRS").

Set out below is the basis of preparation of the Dowlais FY24 Profit Estimate
and the principal assumptions on which it is based.

3.         Basis of preparation and principal assumptions

The Dowlais FY24 Profit Estimate is based on the unaudited condensed interim
financial statements of Dowlais for the six months ended 30 June 2024. The
basis of accounting used is consistent with the accounting policies of
Dowlais, which are in accordance with IFRS and are those that Dowlais expects
to apply in preparing its Annual Report and Financial Statements for the
financial year ended 31 December 2024. Given that the period to which the
Dowlais FY24 Profit Estimate relates has been completed, there are no other
principal assumptions underpinning the Dowlais FY24 Profit Estimate.

Appendix 6

Statement on Quantified Financial Benefits

Part 1

Quantified Financial Benefits Statement

This Announcement contains statements of estimated cost synergies arising from
the Combination (together, the "Quantified Financial Benefits Statement").

A copy of the Quantified Financial Benefits Statement is set out below:

The AAM Directors, having reviewed and analysed the potential cost synergies
of the Combination, and considering the factors they can influence, are highly
confident in the Combined Group's ability to realise approximately $300
million of annual run rate cost synergies, expected to be substantially
achieved by the end of the third year following Completion.

The quantified cost synergies, expected to originate from the cost bases of
AAM and Dowlais, are anticipated to be realised primarily from:

·    SG&A - approximately 30 per cent. across the following sources:

o  Eliminating duplicate public company costs and other costs;

o  Optimisation of the combined workforce;

o  Streamlining of engineering, research, and development expenses; and

o  Elimination of duplicate business and technical offices.

·    Purchasing - approximately 50 per cent. across the following sources:

o  Leveraging enhanced economies of scale and spend across direct and
indirect material suppliers;

o  Utilising vertical integration capabilities to deliver insourcing
initiatives; and

o  Achieving global freight and logistical savings through increased scale,
utilisation and benefits from third-party logistics suppliers.

·    Operations - approximately 20 per cent. across the following sources:

o  Increasing operating efficiencies through the implementation of a
best-of-best operating system; and

o  Optimising the combined global manufacturing footprint.

The AAM Directors expect that approximately 60 per cent. of the annual run
rate cost synergies will be realised by the end of the second year following
Completion, and the full run rate cost savings are expected to be
substantially achieved by the end of the third year following Completion.

The AAM Directors expect that the one-off costs required to deliver on the
synergy plan are approximately equal to one year of full run rate savings.

In addition, the AAM Directors expect an increase in operating working capital
of approximately $13 million required to deliver identified run rate freight
and logistics synergies.

The synergy savings stated are net of anticipated dis-synergies (expected to
be approximately $22 million).

The expected synergies will accrue as a direct result of the Combination and
would not be achieved on a standalone basis.

These statements of estimated cost savings and synergies relate to future
actions and circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies referred to
herein may not be achieved, may be achieved later or sooner than estimated, or
those actually achieved could be materially different from those estimated.
For the purposes of Rule 28 of the Code, the statements of estimated cost
savings and synergies contained in this Announcement are solely the
responsibility of AAM and the AAM Directors. Any statement of intention,
belief or expectation for the Combined Group following the Effective Date is
also an intention, belief or expectation of the AAM Directors and not of the
Dowlais Directors.

These statements are not intended as a profit forecast or profit estimate for
any period and should not be interpreted as such. No part of these statements,
or this Announcement generally, should be construed or interpreted to mean
that the Combined Group's earnings in the first year following the Effective
Date, or in any subsequent period, would necessarily match or be greater than
or be less than those of AAM and/or Dowlais for the relevant preceding
financial period or any other period.

Appendix 6 to this Announcement includes a copy of these statements of
anticipated cost savings and synergies arising out of the Combination and
provides underlying information and bases of belief and calculation.

Appendix 6 to this Announcement also includes reports from AAM's reporting
accountant, Deloitte, and its financial adviser, J.P. Morgan Cazenove, in
connection with the anticipated Quantified Financial Benefits Statement, as
required pursuant to Rule 28.1(a) of the Code, and provides underlying
information and bases for the reporting accountant's and financial adviser's
respective reports. J.P. Morgan Cazenove, as financial adviser to AAM, has
provided such a report for the purposes of the Code stating that, in their
opinion and subject to the terms of the report, the Quantified Financial
Benefits Statement, for which the AAM Directors are responsible, has been
prepared with due care and consideration. Each of Deloitte and J.P. Morgan
Cazenove has given and not withdrawn its consent to the publication of its
report in this Announcement in the form and context in which it is included.

The AAM Board believes that the Combined Group should be able to achieve the
synergies set out in the Quantified Financial Benefits Statement.

Further information on the bases of belief supporting the Quantified Financial
Benefits Statement, including the principal assumptions and sources of
information, is set out below.

Basis of calculation of the Quantified Financial Benefits Statement

 

In preparing the Quantified Financial Benefits Statement, AAM has relied on a
combination of publicly available information and information obtained through
due diligence. In such circumstances, AAM management has made estimates and
assumptions to aid its development of individual synergy initiatives. The
assessment and quantification of the potential synergies have, in turn, been
informed by AAM management's industry experience and knowledge of the existing
businesses, together with consultation with Dowlais management.

 

The cost bases used as the basis for the Quantified Financial Benefits
Statement are a blend of AAM's FY24 forecast financial results and Dowlais'
FY24 forecast financial results, supported where relevant by certain
information from AAM's and Dowlais' budgeted FY25 cost bases.

 

An exchange rate of £ to $1.30 has been used in the compilation of the
synergy initiatives.

 

Cost synergy assumptions were based on (A) a mix (i) detailed, bottom-up
evaluation of the benefits resulting from elimination of duplicate activities
or (ii) AAM's and Dowlais' synergy attainment experience from other relevant
savings programs, (B) the benefits of combined scale economics and (C)
operational efficiencies arising from consolidation.

 

Where appropriate, assumptions were used to estimate the costs of implementing
the new structures, systems and processes required to realise the synergies.

 

In general, the synergy assumptions have been risk-adjusted.

 

In arriving at the Quantified Financial Benefits Statement, the AAM Directors
have made the following assumptions, which are outside the influence of AAM:

·    there will be no material change in underlying operations of either
business from the Combination;

·    there will be no material impact from divestments from Dowlais
existing businesses;

·    there will be no material change to macroeconomic, political,
inflationary, regulatory or legal conditions in the markets or regions in
which AAM and Dowlais operate;

·    there will be no material change in current foreign exchange rates or
interest rates;

·    there will be no material change in accounting standards; and

·    there will be no change in tax legislation or tax rates or other
legislation in the United Kingdom, United States or other countries that could
materially impact the ability to achieve any benefits.

 

In addition, the AAM Directors have made an assumption within the influence of
AAM that there will be no material divestments made by AAM.

 

In addition, the AAM Directors have assumed that the cost synergies are
substantively within AAM's control, albeit that certain elements are dependent
in part on negotiations with third parties.

Reports

As required by Rule 28.1(a) of the Code, Deloitte, as reporting accountants to
AAM, and J.P. Morgan Cazenove, as financial adviser to AAM, have provided the
reports required under the Code.

Important Notes

·    The statements of estimated synergies relate to future actions and
circumstances which, by their nature, involve risks, uncertainties and
contingencies. As a result, the synergies referred to may not be achieved, or
those achieved could be materially different from those estimated.

·    No statement in the Quantified Financial Benefits Statement should be
construed as a profit forecast.

·    Due to the size of the combination and potential scale of the
Combined Group, there may be additional changes to the Combined Group's
operations. As a result, and given the fact that the changes relate to the
future, the resulting cost synergies may be materially greater or less than
those estimated.

·    In arriving at the estimate of synergies set out in this
Announcement, the AAM Board has assumed that there will be no significant
impact on the business of the Combined Group.

 

Part 2

Report from Deloitte LLP on Quantified Financial Benefits Statement

 

The Directors

American Axle & Manufacturing Holdings, Inc.

One Dauch Drive

Detroit

MI 48211-1198

United States of America

 

The Directors

J.P. Morgan Securities plc

25 Bank Street

London

E14 5JP

 

29 January 2025

 

Dear Sirs/Mesdames

OFFER FOR DOWLAIS PLC (the "Target") BY AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC. (the "Offeror")

We report on the statement made by the directors of the Offeror (the
"Directors") of estimated synergy benefits set out in Part 1 of Appendix 6 to
the Rule 2.7 announcement dated 29 January 2025 (the "Announcement") issued by
the Offeror (the "Quantified Financial Benefits Statement" or the
"Statement").

Opinion

In our opinion, the Quantified Financial Benefits Statement has been properly
compiled on the basis stated.

The Statement has been made in the context of the disclosures within Appendix
6 setting out, inter alia, the bases of the Directors' belief (identifying the
principal assumptions and sources of information) supporting the Statement and
their analysis, explanation and quantification of the constituent elements.

Responsibilities

It is the responsibility of the Directors to prepare the Statement in
accordance with Rule 28 of the City Code on Takeovers and Mergers (the
"Takeover Code").

It is our responsibility to form our opinion, as required by Rule 28.1(a) of
the Takeover Code, as to whether the Statement has been properly compiled on
the basis stated and to report that opinion to you.

This report is given solely for the purposes of complying with Rule 28.1(a)(i)
of the "Takeover Code" and for no other purpose.

Therefore, to the fullest extent permitted by law we do not assume any other
responsibility to any person for any loss suffered by any such person as a
result of, arising out of, or in connection with this report or our statement,
required by and given solely for the purposes of complying with Rule 23.2 of
the Takeover Code, consenting to its inclusion in the Announcement.

 

Basis of preparation of the Statement

The Statement has been prepared on the basis set out in Part 1 of Appendix 6
to the Announcement.

Basis of opinion

We conducted our work in accordance with the Standards for Investment
Reporting issued by the Financial Reporting Council in the United Kingdom
("FRC").

We are independent of the Offeror in accordance with the FRC's Ethical
Standard as applied to Investment Circular Reporting Engagements, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.

We have discussed the Statement, together with the underlying plans (relevant
bases of belief/including sources of information and assumptions), with the
Directors and J.P. Morgan. Our work did not involve any independent
examination of any of the financial or other information underlying the
Statement.

We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with reasonable
assurance that the Statement has been properly compiled on the basis stated.

Our work has not been carried out in accordance with auditing or other
standards and practices generally accepted in jurisdictions outside the United
Kingdom, including the United States of America, and accordingly should not be
relied upon as if it had been carried out in accordance with those standards
and practices.  We have not consented to the inclusion of this report and our
opinion in any registration statement filed with the SEC under the US
Securities Act of 1933 (either directly or by incorporation by reference) or
in any offering document enabling an offering of securities in the United
States (whether under Rule 144A or otherwise).  We therefore accept no
responsibility to, and deny any liability to, any person using this report and
opinion in connection with any offering of securities inside the United States
of America or who makes a claim on the basis they had acted in reliance on the
protections afforded by United States of America law and regulation.

We do not express any opinion as to the achievability of the benefits
identified by the Directors in the Statement.

Since the Statement and the assumptions on which it is based relate to the
future and may therefore be affected by unforeseen events, we express no
opinion as to whether the actual benefits achieved will correspond to those
anticipated in the Statement and the differences may be material.

Yours faithfully

 

Deloitte LLP

 

Deloitte LLP is a limited liability partnership registered in England and
Wales with registered number OC303675 and its registered office at 1 New
Street Square, London, EC4A 3HQ, United Kingdom.

Deloitte LLP is the United Kingdom affiliate of Deloitte NSE LLP, a member
firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by
guarantee ("DTTL"). DTTL and each of its member firms are legally separate and
independent entities. DTTL and Deloitte NSE LLP do not provide services to
clients. Please see www.deloitte.com/about to learn more about our global
network of member firms.

 

Part 3

Report from J.P. morgan Securities plc on Quantified Financial Benefits
Statement

Report from J.P. Morgan Cazenove

American Axle & Manufacturing Holdings, Inc.

The Board of Directors

One Dauch Drive

Detroit, Michigan

48211-1198

United States of America

 
 
 
 
 29 January 2025

Dear Sir / Madam,

Recommended cash and share offer for Dowlais Group Plc by American Axle &
Manufacturing Holdings, Inc. ("AAM") (the "Combination"), to be effected by
way of Court-sanctioned scheme of arrangement under Part 26 of the Companies
Act.

We refer to the quantified financial benefits statement (the "Statement") made
by AAM set out in Appendix VI to the Rule 2.7 announcement dated 29 January
2025 (the "Announcement"), for which the board of directors of AAM (the "AAM
Directors") are solely responsible under Rule 28.3 of the UK City Code on
Takeovers and Mergers (the "Code").

We have discussed the Statement (including the assumptions, bases of
calculation and sources of information referred to therein) with the AAM
Directors and those officers and employees of AAM who developed the underlying
plans as well as with Deloitte LLP ("Deloitte") as reporting accountants. The
Statement is subject to uncertainty as described in the Announcement and our
work did not involve an independent examination, or verification, of any of
the financial or other information underlying the Statement.

We have relied upon the accuracy and completeness of all the financial and
other information provided to us by or on behalf of AAM and/or Dowlais, or
otherwise discussed with or reviewed by us, in connection with the Statement,
and we have assumed such accuracy and completeness for the purposes of
providing this letter.

We do not express any view as to the achievability of the quantified financial
benefits, whether on the basis identified by the AAM Directors in the
Statement, or otherwise. We have also reviewed the work carried out by
Deloitte and have discussed with Deloitte its opinion addressed to you and us
on this matter and which is set out in Part 2 of Appendix VI of the
Announcement, and the accounting policies and bases of calculation for the
Statement.

This letter is provided to you pursuant and subject to the terms of our
engagement letter with AAM and solely having regard to the requirements of,
and in connection with, Rule 28.1(a)(ii) of the Code and for no other purpose.
We accept no responsibility to AAM, Dowlais or their shareholders or any
person other than the AAM Directors in respect of the contents of this letter.
We are acting exclusively as financial advisers to AAM and no one else in
connection with the offer by AAM for Dowlais and it was for the purpose of
complying with Rule 28.1(a)(ii) of the Code that AAM requested J.P. Morgan
Cazenove to prepare this letter relating to the Statement. No person other
than the AAM Directors can rely on the contents of this letter, and to the
fullest extent permitted by law, we expressly exclude and disclaim all
liability (whether in contract, tort or otherwise) to any other person, in
respect of this letter, its contents or the work undertaken in connection with
this letter or any of the results or conclusions that may be derived from this
letter or any written or oral information provided in connection with this
letter, and any such liability is expressly disclaimed except to the extent
that such liability cannot be excluded by law.

On the basis of the foregoing, we consider that the Statement, for which you
as the AAM Directors are solely responsible, has been prepared with due care
and consideration.

J.P. Morgan Securities plc

Appendix 7

Definitions

The following definitions apply throughout this Announcement unless the
context otherwise requires:

 

 "AAM"                                      American Axle & Manufacturing Holdings, Inc., a Delaware corporation
 "AAM Board"                                the board of directors of AAM as at the date of this Announcement or, where
                                            the context so requires, the directors of AAM from time to time
 "AAM Directors"                            the directors of AAM as at the date of this Announcement or, where the context
                                            so requires, the directors of AAM from time to time
 "AAM FY24 Profit Estimate"                 has the meaning given in paragraph 9
 "AAM Group"                                AAM and its subsidiary undertakings from time to time
 "AAM Proxy Statement"                      the proxy statement of AAM in connection with the AAM Shareholder Meeting (as
                                            amended and supplemented from time to time)
 "AAM Shares"                               the shares of common stock of AAM issued and outstanding
 "AAM Shareholder Meeting"                  the duly convened meeting of the AAM Shareholders held for the purpose of
                                            considering and approving the amendment to AAM's certificate of incorporation
                                            and the issuance of the New AAM Shares, including any adjournment or
                                            postponement thereof
 "AAM Shareholders"                         the holders of AAM Shares from time to time
 "Announcement"                             this announcement
 "AWG"                                      has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "AWV"                                      has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Barclays"                                 Barclays Bank PLC, acting through its Investment Bank
 "BMWK"                                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Brazil Antitrust Condition"               has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Business Day"                             a day, not being a public holiday, Saturday or Sunday, on which banks in
                                            London and New York are open for normal business
 "Buyback Programme"                        the share buyback programme of up to £50 million announced on 21 March 2024
                                            by Dowlais on the London Stock Exchange
 "CADE"                                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "China Antitrust Condition"                has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Clean Team Agreement"                     the clean team confidentiality agreement entered into between AAM and Dowlais
                                            dated 13 December 2024, as described in paragraph 16 of this Announcement
 "Closing Price"                            the closing price of a Dowlais Share as derived from Bloomberg on any
                                            particular date
 "CMA"                                      has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "CMA Briefing Paper"                       means the briefing paper to be submitted to the CMA by AAM in relation to the
                                            Combination
 "Code"                                     the Takeover Code issued by the Panel, as amended from time to time
 "COFECE"                                   has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Combination"                              the proposed acquisition by AAM of the entire issued and to be issued ordinary
                                            share capital of Dowlais not already owned or controlled by AAM on the terms
                                            and subject to the conditions set out in this Announcement, to be implemented
                                            by means of the Scheme (or should AAM so elect under certain circumstances
                                            described in this Announcement, by means of a Takeover Offer), and where the
                                            context requires, any subsequent revision, variation, extension or renewal
                                            thereof
 "Combined Group"                           the combined group following the Combination, comprising the AAM Group and the
                                            Dowlais Group
 "Commission"                               has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Companies Act"                            the Companies Act 2006, as amended from time to time
 "Completion"                               the Combination becoming Effective in accordance with its terms
 "Condition(s)"                             the conditions to the implementation of the Combination, as set out in Part 1
                                            of Appendix 1 to this Announcement and to be set out in the Scheme Document
 "Co-operation Agreement"                   the co-operation agreement dated the date of this Announcement between Dowlais
                                            and AAM as described in paragraph 16 of this Announcement
 "Court"                                    the High Court of Justice of England and Wales
 "Court Meeting"                            the meeting or meetings of Scheme Shareholders to be convened by an order of
                                            the Court pursuant to section 896 of the Companies Act, notice of which will
                                            be set out in the Scheme Document, for the purposes of considering, and if
                                            thought fit, approving the Scheme (with or without amendment) and any
                                            adjournment, postponement or reconvention thereof
 "Court Order"                              the order of the Court sanctioning the Scheme under section 899 of the
                                            Companies Act
 "CREST"                                    the system for the paperless settlement of trades in securities and the
                                            holding of uncertificated securities operated by Euroclear
 "Dealing Arrangement"                      an arrangement of the kind referred to in Note 11(a) in the definition of
                                            acting in concert in the Code
 "Dealing Disclosure"                       an announcement pursuant to Rule 8 of the Code containing details of dealings
                                            in relevant securities of a party to an Combination
 "Deloitte"                                 Deloitte LLP, the United Kingdom affiliate of Deloitte NSE, a member firm of
                                            Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee
                                            ("DTTL"), DTTL and each of its member firms being legally separate and
                                            independent entities
 "Disclosed"                                the information: (a) disclosed by, or on behalf of Dowlais to AAM or AAM's
                                            professional advisers (in their capacity as such in relation to the
                                            Combination); (b) in the Annual Report and Financial Statements of Dowlais for
                                            the year ended 31 December 2023; (c) in the interim results of Dowlais for the
                                            six month period ending on 30 June 2024; (d) in this Announcement; (e) in any
                                            other announcement made by Dowlais via a Regulatory Information Service before
                                            the date of this Announcement; (f) in the virtual data room operated on behalf
                                            of Dowlais for the purposes of the Combination (which AAM and/or its advisers
                                            were able to access prior to the date of this Announcement); (g) in any
                                            filings made by Dowlais with the Registrar of Companies in England; or (h) as
                                            otherwise fairly disclosed to AAM (or its officers, employees, agents or
                                            advisers in each case in their capacity as such) before the date of this
                                            Announcement
 "Dowlais"                                  Dowlais Group plc, a company incorporated in England and Wales with registered
                                            number 14591224
 "Dowlais Articles"                         the articles of association of Dowlais in force from time to time
 "Dowlais Directors" or "Dowlais Board"     the directors of Dowlais as at the date of this Announcement or, where the
                                            context so requires, the directors of Dowlais from time to time
 "Dowlais FY24 Profit Estimate"             has the meaning given in Appendix 5
 "Dowlais Group"                            Dowlais and its subsidiary undertakings from time to time and where the
                                            context permits, each of them
 "Dowlais Meetings"                         the Court Meeting and the General Meeting
 "Dowlais Share Plans"                      the Dowlais 2023 Performance Share Plan and the Dowlais 2024 Omnibus Share
                                            Plan, each as amended from time to time
 "Dowlais Shareholders"                     holders of Dowlais Shares from time to time
 "Dowlais Shares"                           the ordinary shares of 1 pence each in the capital of Dowlais
 "DTRs"                                     the Disclosure Guidance and Transparency Rules of the FCA under FSMA and
                                            contained in the FCA's publication of the same name, as amended from time to
                                            time
 "EA"                                       has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Effective"                                in the context of the Combination: (a) if the Combination is implemented by
                                            way of the Scheme, the Scheme having become effective pursuant to its terms;
                                            or (b) if the Combination is implemented by way of the Takeover Offer, the
                                            Takeover Offer having been declared or having become unconditional in
                                            accordance with the requirements of the Code
 "Effective Date"                           the date on which the Combination becomes Effective
 "EU Antitrust Condition"                   has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "EU FSR"                                   has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "EU FSR Condition"                         has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "EUMR"                                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Euroclear"                                Euroclear UK & International Limited
 "Eurozone"                                 the member states of the European Union that have adopted the euro as their
                                            common currency and sole legal tender
 "Excluded Shares"                          any Dowlais Shares:

                                            (i)         beneficially owned by AAM or any other member of the AAM
                                            Group at the Scheme Record Time; and

                                            (ii)        held by Dowlais as treasury shares (within the meaning of
                                            the Companies Act)
 "FCA"                                      Financial Conduct Authority or its successor from time to time
 "Forms of Election"                        the form or forms of election for use in connection with the Mix and Match
                                            Facility
 "Forms of Proxy"                           the forms of proxy in connection with each of the Court Meeting and the
                                            General Meeting, which shall accompany the Scheme Document
 "France FDI Condition"                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "French FDI Authority"                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "French FDI Law"                           has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "FSMA"                                     the Financial Services and Markets Act 2000, as amended from time to time
 "FY24 Final Dividend"                      has the meaning given in paragraph 13 (Dividends) of this Announcement
 "Germany FDI Condition"                    has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "General Meeting"                          the general meeting of Dowlais Shareholders to be convened for the purpose of
                                            considering and, if thought fit, approving, the Resolutions in relation to the
                                            Combination, notice of which shall be contained in the Scheme Document and any
                                            adjournment, postponement or reconvention thereof
 "HMRC"                                     HM Revenue and Customs
 "HSR Act"                                  has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Investec"                                 Investec Bank plc
 "IRC"                                      the U.S. Internal Revenue Code
 "Joint Defense Agreement"                  the joint defense agreement entered into between AAM and Dowlais dated 6
                                            December 2024, as described in paragraph 16 of this Announcement
 "J.P. Morgan"                              J.P. Morgan Securities LLC, together with its affiliate J.P. Morgan Cazenove
 "J.P. Morgan Cazenove"                     J.P. Morgan Securities plc (which conducts its UK investment banking business
                                            as J.P. Morgan Cazenove and which is authorised in the United Kingdom by the
                                            Prudential Regulation Authority and regulated in the United Kingdom by the
                                            Prudential Regulation Authority and the Financial Conduct Authority)
 "KFTC"                                     means the Korea Fair Trade Commission
 "Korea Antitrust Condition"                has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Last Accounts Date"                       31 December 2023
 "London Stock Exchange"                    the London Stock Exchange plc or its successor
 "Long Stop Date"                           29 June 2026 or such later date (if any) as AAM and Dowlais may agree, with
                                            the consent of the Panel, and the Court may allow
 "Merger Notice"                            means a notice to the CMA in the prescribed form as contemplated by Section 96
                                            of the Enterprise Act 2002
 "Mexico Antitrust Condition"               has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Mix and Match Facility"                   the facility under which Dowlais Shareholders are entitled to elect to vary
                                            the proportions in which they receive New AAM Shares and in which they receive
                                            cash in respect of their holdings of Dowlais Shares to the extent that other
                                            such Dowlais Shareholders make off-setting elections
 "MRFTA"                                    has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "New AAM Shares"                           the new shares of common stock of AAM proposed to be issued to Dowlais
                                            Shareholders in connection with the Combination
 "New York Stock Exchange"                  the New York Stock Exchange or its successor
 "Offer Period"                             the offer period (as defined by the Code) relating to Dowlais, which commenced
                                            on 29 January 2025
 "Official List"                            the official list maintained by the FCA pursuant to Part 6 of FSMA
 "Opening Position Disclosure"              has the same meaning as in Rule 8 of the Code
 "Overseas Shareholders"                    Dowlais Shareholders (or nominees of, or custodians or trustees for Dowlais
                                            Shareholders) who are resident in, ordinarily resident in, or citizens of,
                                            jurisdictions outside the United Kingdom
 "Panel"                                    the Panel on Takeovers and Mergers
 "Phase 1 Investigation"                    means an investigation by the CMA to enable it to determine whether to make a
                                            reference under Section 33 of the Enterprise Act 2002
 "Phase 2 CMA Reference"                    has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "PRA"                                      the Prudential Regulation Authority as defined in FSMA, or any successor
                                            regulatory authority
 "PRC AML"                                  has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Quantified Financial Benefits Statement"  the statements of estimated cost savings and synergies arising out of the
                                            Combination set out in Appendix 6 to this Announcement
 "Registrar of Companies"                   the Registrar of Companies in England and Wales
 "Regulatory Information Service"           any information service authorised from time to time by the FCA for the
                                            purpose of disseminating regulatory announcements
 "Relevant Authority"                       any central bank, ministry, governmental, quasigovernmental, supranational
                                            (including the European Union), statutory, regulatory or investigative body,
                                            authority or tribunal (including any national or supranational antitrust,
                                            competition or merger control authority, any sectoral ministry or regulator
                                            and any foreign investment review body), national, state, municipal or local
                                            government (including any subdivision, court, tribunal, administrative agency
                                            or commission or other authority thereof), any entity owned or controlled by
                                            them, any private body exercising any regulatory, taxing, importing or other
                                            authority, any trade agency, association, institution or professional or
                                            environmental body in any jurisdiction
 "relevant securities"                      shall be construed in accordance with the Code
 "Resolutions"                              the resolutions proposed to be passed at the General Meeting in connection
                                            with the implementation of the Scheme
 "Restricted Jurisdiction(s)"               any jurisdiction (other than the United Kingdom) where local laws or
                                            regulations may result in a significant risk of civil, regulatory or criminal
                                            exposure if information concerning the Combination is sent or made available
                                            to Dowlais Shareholders in that jurisdiction
 "Revised Confidentiality Agreement"        the revised confidentiality agreement dated 14 January 2025 between AAM and
                                            Dowlais, as described in paragraph 16 of this Announcement
 "Rothschild & Co"                          N.M. Rothschild & Sons Limited
 "SAMR"                                     has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "Sanction Hearing"                         the hearing of the Court at which Dowlais will seek an order sanctioning the
                                            Scheme pursuant to Part 26 of the Companies Act
 "Scheme"                                   the proposed scheme of arrangement under Part 26 of the Companies Act between
                                            Dowlais and Scheme Shareholders in connection with the Combination, with or
                                            subject to any modification, addition or condition approved or imposed by the
                                            Court and agreed by Dowlais and AAM
 "Scheme Document"                          the document to be sent to Dowlais Shareholders and persons with information
                                            rights containing, among other things, the Scheme, the full terms and
                                            conditions of the Scheme and notices of the Dowlais Meetings and the Forms of
                                            Proxy
 "Scheme Record Time"                       the time and date to be specified in the Scheme Document, expected to be 6.00
                                            p.m. on the Business Day immediately after the Sanction Hearing
 "Scheme Shareholders"                      the holders of Scheme Shares
 "Scheme Shares"                            all Dowlais Shares:

                                            (i)         in issue as at the date of the Scheme Document and which
                                            remain in issue at the Scheme Record Time;

                                            (ii)        (if any) issued after the date of the Scheme Document and
                                            before the Voting Record Time and which remain in issue at the Scheme Record
                                            Time; and

                                            (iii)       (if any) issued on or after the Voting Record Time and
                                            before the Scheme Record Time, either on terms that the original or any
                                            subsequent holders thereof shall be bound by the Scheme or in respect of which
                                            the holders thereof shall have agreed in writing to be bound by the Scheme,
                                            and which remain in issue at the Scheme Record Time,

                                            but in each case other than the Excluded Shares
 "SEC"                                      the United States Securities and Exchange Commission
 "Significant Interest"                     in relation to an undertaking, a direct or indirect interest of 20 per cent.
                                            or more of: (a) the total voting rights conferred by the equity share capital
                                            (as defined in section 548 of the Companies Act) of such undertaking; or (b)
                                            the relevant partnership interest
 "Takeover Offer"                           if (with the consent of the Panel and subject to the terms of the Co-operation
                                            Agreement), AAM elects to implement the Combination by way of a takeover offer
                                            (as defined in Chapter 3 of Part 28 of the Companies Act), the offer to be
                                            made by or on behalf of AAM to acquire the entire issued and to be issued
                                            ordinary share capital of Dowlais on the terms and subject to the conditions
                                            to be set out in the related offer document and, where the context permits,
                                            any subsequent revision, variation, extension or renewal of such takeover
                                            offer
 "Third Party"                              has the meaning given in Condition 6(a) (General Third Party approvals) in
                                            Appendix 1 to this Announcement
 "UK" or "United Kingdom"                   the United Kingdom of Great Britain and Northern Ireland
 "UK Antitrust Condition"                   has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "UK Listing Rules"                         the listing rules made under FSMA by the FCA and contained in the FCA's
                                            publication of the same name, as amended from time to time
 "UK Market Abuse Regulation"               the Market Abuse Regulation (EU) No 596/2014 as it forms part of the laws of
                                            the United Kingdom from time to time
 "U.S." or "United States"                  the United States of America, its territories and possessions, any state of
                                            the United States and the District of Columbia
 "U.S. Antitrust Condition"                 has the meaning given in Condition 3 (Official authorisations and regulatory
                                            clearances) in Appendix 1 to this Announcement
 "U.S. Exchange Act"                        the U.S. Securities Exchange Act of 1934, as amended from time to time, and
                                            the rules and regulations promulgated thereunder
 "U.S. GAAP"                                the accounting principles generally accepted in the U.S.
 "U.S. Securities Act"                      the U.S. Securities Act of 1933, as amended from time to time, and the rules
                                            and regulations promulgated thereunder
 "US$" or "dollar"                          the lawful currency of the United States of America from time to time
 "Voting Record Time"                       the time and date to be specified in the Scheme Document by reference to which
                                            entitlement to vote on the Scheme will be determined
 "Wider AAM Group"                          AAM Group and associated undertakings and any other body corporate,
                                            partnership, joint venture or person in which AAM and all such undertakings
                                            (aggregating their interests) have a Significant Interest
 "Wider Dowlais Group"                      Dowlais Group and associated undertakings and any other body corporate,
                                            partnership, joint venture or person in which Dowlais and all such
                                            undertakings (aggregating their interests) have a Significant Interest

In this Announcement: (a) "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings given
to them in the Companies Act; and (b) all times are London times, unless
otherwise stated.

References to the singular include the plural and vice versa.

All references to "pounds", "pounds sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.

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