REG - American Axle & Mfg. Dowlais Group PLC - UPDATE ON COMBINATION AND SECONDARY LISTING

DowlaisAnnouncement

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RNS Number : 9230I  American Axle & Mfg Hldgs, Inc.  16 May 2025

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

FOR IMMEDIATE RELEASE

16 May 2025

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. ("AAM") AND DOWLAIS GROUP PLC
("DOWLAIS")

UPDATE ON RECOMMENDED COMBINATION OF AAM AND DOWLAIS AND UK SECONDARY LISTING

 

On 29 January 2025, the boards of AAM and Dowlais announced (the "Rule 2.7
Announcement") that they had reached an agreement on a recommended cash and
share combination (the "Combination").

Unless otherwise defined in this announcement, capitalised terms used in this
announcement shall have the same meanings given to them in the Rule 2.7
Announcement.

The boards of both AAM and Dowlais continue to believe that the strategic
rationale for the Combination remains compelling. Recent global events have
further highlighted the attractiveness of the Combination, which will create a
stronger business that is resilient across customers, geographies and
products, resulting in the Combined Group being better positioned to navigate
and succeed in an increasingly dynamic automotive industry and macroeconomic
environment.

Since the Rule 2.7 Announcement, the momentum of integration planning has
continued at pace. Both integration planning teams have worked together over
recent weeks, including site visits, further increasing the confidence and
excitement in the value creation opportunity that the Combination brings and
enabling the delivery of the announced synergies as planned. This ongoing work
will include defining a joint organisation structure and taking a best of both
approach to how the combined group can operate post completion. The board of
AAM remains confident in realising annual run rate cost synergies of at least
$300m, expected to be substantially complete by the end of the third year
after Completion.((1))

Regulatory filings are progressing as planned and remain on-track, with the
U.S. Antitrust Condition already satisfied, as announced on 13 March, and
completion of all other initial antitrust submissions with the required
jurisdictions listed in the Rule 2.7 Announcement.

UK Secondary Listing

AAM is pleased to announce that as part of the envisaged Combination, it
intends to seek a secondary listing and admission of AAM Shares to trading on
the London Stock Exchange (the "Secondary Listing"). AAM Shares would be
admitted to the equity shares (international commercial companies secondary
listing) category of the Official List maintained by the Financial Conduct
Authority (the "FCA") and to trading on the Main Market for listed securities
of the London Stock Exchange. This will ensure a greater range of both
existing and prospective shareholders are able to access the future value
creation opportunity of the Combination. AAM will now commence the process of
obtaining such listing, including the publication of a prospectus approved by
the FCA (the "AAM Prospectus"). It is noted that the obtaining of the
Secondary Listing is not a condition to the Scheme. However, AAM and Dowlais
have entered into an amendment to the Co-operation Agreement (which will be
available on AAM's website at
https://www.aam.com/investors/offer-for-dowlais-group-plc-documentation
(https://www.aam.com/investors/offer-for-dowlais-group-plc-documentation) and
Dowlais' website at
https://www.dowlais.com/investors/recommended-combination-with-american-axle-manufacturing-holdings-inc-/
(https://www.dowlais.com/investors/recommended-combination-with-american-axle-manufacturing-holdings-inc-/)
promptly and in any event by no later than 12 noon (London time) on the
business day following the date of this announcement), pursuant to which AAM
agrees to use all reasonable efforts to ensure the Secondary Listing is
effective at Completion and Dowlais has agreed to customary provisions
regarding the provision of information necessary for the publication of the
AAM Prospectus.

Publication of AAM Proxy Statement

On 15 May 2025, AAM filed a preliminary proxy statement on Schedule 14A with
the United States Securities and Exchange Commission (the "Preliminary Proxy
Statement"). A copy of the Preliminary Proxy Statement is available on AAM's
website at
https://www.aam.com/investors/offer-for-dowlais-group-plc-documentation
(https://www.aam.com/investors/offer-for-dowlais-group-plc-documentation) ).

As contemplated in the Rule 2.7 Announcement, the Scheme Document is expected
to be posted to Dowlais Shareholders in June 2025, following publication of
the AAM Proxy Statement.

(1)        This statement includes a quantified financial benefits
statement in relation to the Combination which was been reported on for the
purposes of Rule 28 of the Code. Further information on the quantified
financial benefits statement, including the basis of preparation and principal
assumptions, are set out in the Appendix to this announcement.

Enquiries

 AAM

 David H. Lim, Head of Investor Relations                            +1 (313) 758-2006
 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)
 Jim Barron                                                          +1 212 687 8080
 Charlie Chichester / Rory King                                      +44 20 7251 3801

 Dowlais

 Investors
 Pier Falcione                                                       +44(0)7855 185 420

 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

Allen Overy Shearman Sterling LLP is acting as legal adviser to AAM. Slaughter
and May is acting as legal adviser to Dowlais.

 

Disclaimers

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
(https://protect.checkpoint.com/v2/___http:/www.sec.gov/___.YzJ1OmFtZXJpY2FuYXhsZW1hbnVmYWN0dXJpbmc6YzpvOjJkZjZkMWQ2OWU5YjkwZmI1ODBhZDdhNzU4OWYyYzI2OjY6NTBkODoxNDdiMzJjOWI4ODg1NTU0MjEwNzZiMzYyOGI1MjBhMWIyZGVlMTRjY2I5ZjFmMTdmMjBhYzVjNDU2NDllMDVkOnA6RjpO)
 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.

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. 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

In this announcement, AAM makes statements concerning its and Dowlais'
expectations, beliefs, plans, objectives, goals, strategies, and future events
or performance, including, but not limited to, certain statements related to
the ability of AAM and Dowlais to consummate AAM's business combination with
Dowlais (the "Business Combination") in a timely manner or at all; future
capital expenditures, expenses, revenues, economic performance, synergies,
financial conditions, market growth, dividend policy, losses and future
prospects and business; and management strategies and the expansion and growth
of AAM's and the combined company's operations.  Such statements are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and relate to trends and events that may affect
AAM's or the combined company's future financial position and operating
results.  The terms such as "will," "may," "could," "would," "plan,"
"believe," "expect," "anticipate," "intend," "project," "target," and similar
words or expressions, as well as statements in future tense, are intended to
identify forward-looking statements.  Forward-looking statements should not
be read as a guarantee of future performance or results and will not
necessarily be accurate indications of the times at, or by, which such
performance or results will be achieved.  These forward-looking statements
involve certain risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these statements.  These
risks and uncertainties related to AAM include factors detailed in the reports
AAM files with the United States Securities and Exchange Commission (the
"SEC"), including those described under "Risk Factors" in its most recent
Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.  These
forward-looking statements speak only as of the date of this communication.
AAM expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein to
reflect any change in its or Dowlais' expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.

Additional Information

This announcement may be deemed to be solicitation material in respect of the
Business Combination, including the issuance of AAM's shares of common stock
in respect of the Business Combination.  In connection with the foregoing
proposed issuance of AAM's shares of common stock, AAM expects to file a proxy
statement on Schedule 14A (together with any amendments and supplements
thereto, the "Proxy Statement") with the SEC.  To the extent the Business
Combination is effected as a scheme of arrangement under English law, the
issuance of AAM's shares of common stock in connection with the Business
Combination would not be expected to require registration under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), pursuant to an
exemption provided by Section 3(a)(10) under the Securities Act.  In the
event that AAM exercises its right to elect to implement the Business
Combination by way of a takeover offer (as defined in the UK Companies Act
2006) or otherwise determines to conduct the Business Combination in a manner
that is not exempt from the registration requirements of the Securities Act,
AAM expects to file a registration statement with the SEC containing a
prospectus with respect to the AAM's shares that would be issued in the
Business Combination.  INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT, THE SCHEME DOCUMENT, AND OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED BY AAM WITH THE SEC OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT
(IF ANY) CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT AAM, THE BUSINESS COMBINATION AND RELATED
MATTERS.  Investors and shareholders will be able to obtain free copies of
the Proxy Statement, the scheme document, and other documents filed by AAM
with the SEC at the SEC's website at http://www.sec.gov
(https://protect.checkpoint.com/v2/___http:/www.sec.gov___.YzJ1OmFtZXJpY2FuYXhsZW1hbnVmYWN0dXJpbmc6YzpvOjJkZjZkMWQ2OWU5YjkwZmI1ODBhZDdhNzU4OWYyYzI2OjY6YzAyNDoxYWY5NDNhM2YzY2MyMTlkZDU0YWYxZGI1NzVkYTFmYTQxODA5NDk3Mjk0NTg4YjZlNjcyZjVkMTA5MjkzYjQ1OnA6RjpO)
.  In addition, investors and shareholders will be able to obtain free copies
of the Proxy Statement, the scheme document, and other documents filed by AAM
with the SEC at https://www.aam.com/investors
(https://protect.checkpoint.com/v2/___https:/www.aam.com/investors___.YzJ1OmFtZXJpY2FuYXhsZW1hbnVmYWN0dXJpbmc6YzpvOjJkZjZkMWQ2OWU5YjkwZmI1ODBhZDdhNzU4OWYyYzI2OjY6NzEwOTplZWJkYWM0NWE1NzhhNjIyNTFkNmY0YjU4MDg0ZGFkMzFlNTRlYTcxYzNjMGExNzBlM2UwMDg1OGU3YWQxNDA1OnA6RjpO)
.

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 Business Combination, including the
proposed issuance of AAM's shares of common stock in connection with the
Business Combination.  Information regarding AAM's directors and executive
officers is contained in its Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, which was filed with the SEC on February 16, 2024,
the definitive proxy statement on Schedule 14A for AAM's 2024 annual meeting
of stockholders, which was filed with the SEC on March 21, 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 Proxy Statement 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 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 by AAM.  These
documents may be obtained free of charge from the SEC's website at www.sec.gov
and AAM's website at https://www.aam.com/investors
(https://protect.checkpoint.com/v2/___https:/www.aam.com/investors___.YzJ1OmFtZXJpY2FuYXhsZW1hbnVmYWN0dXJpbmc6YzpvOjJkZjZkMWQ2OWU5YjkwZmI1ODBhZDdhNzU4OWYyYzI2OjY6NzEwOTplZWJkYWM0NWE1NzhhNjIyNTFkNmY0YjU4MDg0ZGFkMzFlNTRlYTcxYzNjMGExNzBlM2UwMDg1OGU3YWQxNDA1OnA6RjpO)
.

No Offer or Solicitation

This announcement is not intended to and shall not constitute an offer to sell
or the solicitation of an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote of approval, nor shall there be
any sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.

Publication on website

This announcement is required to be published pursuant to Rule 26 of the Code
and will be available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on AAM's website at
https://www.aam.com/investors 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.

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.

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

Statement on Quantified Financial Benefits

The Rule 2.7 Announcement contained statements of estimated cost synergies
arising from the Combination (together, the "Quantified Financial Benefits
Statement"), which are repeated in the Preliminary Proxy Statement and this
announcement.

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

The AAM Directors, having reviewed and analyzed the potential cost synergies
of the Combination, and considering the factors they can influence, are highly
confident in the Combined Group's ability to realize approximately $300
million USD 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  Optimization 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  Optimizing the combined global manufacturing footprint.

The AAM Directors expect that approximately 60 per cent. of the annual run
rate cost synergies will be realized 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 the Rule 2.7 Announcement, the Preliminary
Proxy Statement and 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 the Rule 2.7 Announcement, the Preliminary Proxy Statement 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.

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. Copies of those reports were set out in the
Rule 2.7 Announcement.

As required by Rule 27.2(d) of the Code, the AAM Directors confirm that:

·     there have been no material changes to the Quantified Financial
Benefits Statement since January 29, 2025 and the Quantified Financial
Benefits Statement remains valid; and

·     each of Deloitte and J.P. Morgan Cazenove has confirmed to AAM that
their respective reports produced in connection with the Quantified Financial
Benefits Statement continue to apply.

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 the Rule 2.7
Announcement, the Preliminary Proxy Statement and this announcement, the AAM
Board has assumed that there will be no significant impact on the business of
the Combined Group.

 

 

 

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