American Axle, MPG deal likely to close within weeks
Detroit — American Axle and Manufacturing Holdings Inc.’s acquisition of Metaldyne Performance Group Inc. is set to close within weeks, American Axle’s president said Thursday.
Both automotive suppliers have scheduled shareholder approval votes for April 5. The deal also requires one outstanding regulatory approval and is on track to close in the second quarter, said Mike Simonte, president of the Detroit-based axle and driveline supplier that was founded in 1994 when investors bought five former General Motors plants.
In November, American Axle said it would buy Southfield-based MPG for $1.6 billion cash and stock and assume $1.7 billion in debt. American Axle has more than 13,000 employees. Metaldyne makes powertrain and suspension parts, generates annual sales of about $3 billion and employs about 12,000 workers.
Simonte would not comment at a media event at company headquarters on any specific workforce reductions planned as part of the acquisition, but said there are some management redundancies. He said the deal will help the company “significantly diversify.” American Axle has said there is some overlap in the companies’ metal forming businesses.
American Axle projects its revenue this year without the acquisition will grow to about $4.1 billion, up from $3.95 billion in 2016.
By the end of 2019, American Axle expects its EcoTrac disconnecting all-wheel drive system revenue to reach about $700 million. The company said it has manufactured more than 600,000 EcoTrac systems since it was introduced on the 2014 Jeep Cherokee.
It will launch next year a more fuel-efficient, smaller and more lightweight next-generation EcoTrac system on a global vehicle.
The company supplies the EcoTrac disconnecting all-wheel drive to GM, Fiat Chrysler Automobiles NV and Ford Motor Co., though Simonte declined to provide vehicle specifics for the manufacturers.
American Axle also is expanding into hybrid and electric drive-line systems, with its technology set to debut early next year on a premium European manufacturer’s vehicle it did not identify. Simonte said American Axle is doing quotes for a few other customers on the technology and could announce a second customer later this year.
The supplier also is developing a new lightweight axle and drive unit technology called Quantum and has three demonstration projects with automakers under way now, American Axle said.
Phil Guys, American Axle’s chief technology officer, said Quantum allows up to a 35 percent reduction in mass and improves fuel economy.