Shearman & Sterling is advising American Axle & Manufacturing Holdings, Inc. (AAM) on its acquisition of Metaldyne Performance Group Inc. (MPG). AAM is a world leader in the manufacturing, engineering, design and validation of driveline and drivetrain systems and related components and modules, chassis systems, electric drive systems and metal-formed products for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. MPG is a leading provider of highly engineered lightweight components for use in powertrain and suspension applications for the global light, commercial and industrial vehicle markets.
Under the terms of the merger agreement, AAM will acquire all outstanding shares of MPG in a cash and stock transaction valued at approximately $1.6 billion, plus the assumption of $1.7 billion in net debt. Each share of MPG’s common stock will be exchanged for $13.50 per share in cash and 0.5 shares of AAM common stock. AAM’s shareholders will own approximately 70% of the combined company and MPG’s shareholders will own approximately 30% upon closing of the transaction, which is expected in the first half of 2017, subject to shareholder and regulatory approval and other customary closing conditions. Private equity firm American Securities LLC, the controlling stockholder of Metaldyne, will own 23% of the combined company.
The combination of AAM and MPG brings together highly complementary businesses and forms a premier Tier 1 supplier with broad capabilities across powertrain, drivetrain and driveline product lines, as well as diversified global customer base and end-markets.
The Shearman & Sterling team included partners Scott Petepiece, Daniel Litowitz (both New York-Mergers & Acquisitions), Lisa Jacobs (New York-Capital Markets), Denise Grant (New York-Project Development & Finance), Laurence Bambino (New York-Tax), John Cannon (New York-Compensation, Governance & ERISA), Dale Collins, Jessica Delbaum (both New York-Antitrust) and Jordan Altman (New York-Intellectual Property Transactions); counsel Barbara Edwards (New York-Project Development & Finance) and Harald Halbhuber (New York-Capital Markets); and associates Roger Morscheiser, Cody Wright and Christopher Glenn (all New York-Mergers & Acquisitions).