American Axle & Manufacturing Announces Asset Purchase Agreement with FormTech Industries
DETROIT, December 5, 2008: American Axle & Manufacturing (AAM), which is traded as AXL on the NYSE, today announced that it has executed an asset purchase agreement with FormTech Industries LLC ("FormTech").
As part of this agreement, AAM exchanged its hub and spindle forging business for FormTech's differential gear, hypoid pinion and ring gear forging businesses. In order to compensate for the difference in value between the assets and businesses exchanged by the parties, AAM made a cash payment to FormTech. The parties also exchanged certain direct and indirect inventories, fixed assets and tooling related to the exchanged businesses.
Other key aspects of the agreement include:
The sale of AAM's Tonawanda Forge Facility to a third party. FormTech will continue to operate in the Tonawanda facility.
AAM's acquisition of FormTech's 50,000 square-foot manufacturing facility, in Ft. Wayne, Indiana. AccuGear, Inc., a newly formed AAM subsidiary, will produce net shaped differential gears for a variety of customers.
"Through this asset purchase agreement, AAM has strategically acquired new forging process technology. This strengthens AAM's competitive position in the North American automotive forging market and enhances our ability to expand and diversify AAM's market penetration into transaxle components for passenger cars and crossover vehicles, as well as transfer case and all-wheel-drive components," says AAM Co-Founder, Chairman & CEO Richard E. Dauch.