American Axle Gets China’s Green Light for Dowlais Deal

American Axle & Manufacturing AXL, a global automotive and mobility supplier, has received an important regulatory approval from China for its planned $1.44 billion acquisition of Dowlais Group, which also owns GKN Automotive. The deal is expected to be completed in the first quarter of 2026, subject to remaining regulatory approvals.

Once the deal is completed, the combined group will operate under American Axle’s leadership, with a wider product range and a stronger global presence. The deal announced earlier includes both cash and shares and is aimed at creating a larger and more diversified global auto parts supplier with a stronger focus on electric vehicle technology.

The acquisition comes at a time when the global auto industry is undergoing major changes. Carmakers and suppliers are investing heavily in new technologies, including electric and hybrid vehicles. By combining operations, American Axle and Dowlais seek to gain scale, cut costs and better serve global customers.

The transaction is expected to create substantial short- and long-term value for shareholders while contributing to a more sustainable future. The combined company will benefit from an extensive, powertrain-agnostic product lineup, a global market presence, a strong commitment to innovation, and enhanced financial strength, ensuring its ability to meet customer demands and navigate a rapidly evolving industry landscape.

AXL shareholders are expected to own about 51% of the combined company, while Dowlais shareholders will own about 49% and receive cash plus American Axle shares.

China’s approval, granted by the State Administration for Market Regulation (“SAMR”), was a crucial step because GKN Automotive has a significant manufacturing and joint-venture presence in China. The regulator approved the deal but set conditions to protect competition and customers in the Chinese market, mainly focusing on how the combined company will behave in the local market after the merger.

According to the approval terms, American Axle and Dowlais must continue to supply customers in China on fair and reasonable terms. They are required to honor existing supply contracts and cannot refuse to renew agreements without valid reasons. The regulator also expects the company to avoid unfair pricing practices and discriminatory treatment of customers. These measures are meant to ensure that Chinese automakers and other buyers are not harmed by the merger.

American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise

American Axle & Manufacturing Holdings, Inc. price-consensus-eps-surprise-chart | American Axle & Manufacturing Holdings, Inc. Quote

AXL currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space are PHINIA Inc. PHIN, Atmus Filtration Technologies Inc. ATMU and APTIV HLDS LTD APTV. At present, PHIN sports a Zacks Rank #1 (Strong Buy), while ATMU and APTV carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PHIN’s 2025 sales and earnings indicates year-over-year growth of 1.1% and 33.4%, respectively. EPS estimates for 2025 and 2026 have improved 45 cents and 81 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for ATMU’s 2025 sales and earnings indicates year-over-year growth of 4.3% and 5.6%, respectively. EPS estimates for 2025 and 2026 have improved 7 cents and 17 cents, respectively, in the past 90 days.

The Zacks Consensus Estimate for APTV’s 2025 sales and earnings indicates year-over-year growth of 2.9% and 23.5%, respectively. EPS estimates for 2025 and 2026 have improved 2 cents and 15 cents, respectively, in the past 60 days.

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