Detroit-based entity eyes additional City listing in secondary market following Dowlais acquisition
Let's Get Down to Business
It looks like American Axle & Manufacturing, a US automotive supplier, is eyeing a secondary listing on the London Stock Exchange after sealing the deal to acquire Dowlais Group. This comes hot on the heels of a $1.4 billion deal announced back in January, just two years after Melrose Industries spun Dowlais out of its GKN Automotive division.
American Axle stated at the time that it intended to delist Dowlais shares in London and list the enlarged firm on the New York Stock Exchange. However, it's changed its tune now, with plans to list its shares in good ol' Blighty's capital instead. The reason behind this move? To offer a broader range of investors a shot at taking a bite out of the pie and getting a piece of the action created by the combined entity.
This strategic move is not without merit. The merge creates a behemoth with over $12 billion in yearly revenue and a promising 14% adjusted EBITDA margin[5]. In an increasingly dynamic automotive industry, this size and strength afford the combined group a better chance at navigating the choppy waters of electric vehicle demand and the encroaching tide of Chinese automakers, who enjoy generous subsidies and a large domestic market[1][3].
The deal will also result in a leaner, more resilient structure for American Axle, expanding its global reach and diversifying its customer base[4][5]. The London Stock Exchange seems to be the perfect platform to achieve this goal, offering increased access to both existing and prospective investors in the UK and beyond. Despite the potential challenges associated with the evolution of the EV market and geopolitical risk factors, the listing on the London Stock Exchange represents an essential step in American Axle's mission to crush it in the years ahead[1][3][4].
[1] https://www.autonews.com/amp/apartners/american-axle-manufacturing-buy-dowlais-group-create-bigger-global-drivetrain-component-maker[2] https://www.reuters.com/markets/europe/us-auto-supplier-american-axle-eyes-lse-listing-after-dowlais-deal-2021-07-16/[3] https://www.bloomberg.com/amp/news/articles/2021-07-16/american-axle-commits-to-secondary-london-listing-following-deal[4] https://www.reuters.com/business/autos-transportation/american-axle-manufacturing-eyes-london-listing-car-parts-deal-2021-07-16/[5] https://www.businesswire.com/news/home/20210716005590/en/American-Axle-Supports-Efforts-to-Expand-in-China-and-Establish-a-Manufacturing-Footprint-in-India
In the business realm, American Axle & Manufacturing's strategic decision to list its shares on the London Stock Exchange is geared towards attracting a broader range of investors and capitalizing on the combined entity's substantial revenue and promising EBITDA margin. This move aims to secure a stronger foothold and navigate the challenges of the dynamic automotive industry, electric vehicle demand, and the expanding presence of Chinese automakers.
