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Acquisitions and Dispositions | 12 Months Ended
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Dec. 31, 2024
Acquisitions and Dispositions [Abstract] |
Acquisitions and Dispositions [Text Block] | 2. ACQUISITIONS AND DISPOSITIONS Pending Combination with Dowlais Group plc On January 29, 2025, AAM announced that we reached agreement with the Board of Directors of Dowlais Group plc (Dowlais) on the terms of a recommended cash and share offer to be made by AAM to acquire the entire issued and to be issued ordinary share capital of Dowlais for approximately $1.44 billion in cash and AAM shares (the Business Combination). In connection with the Business Combination, on January 29, 2025, AAM and Dowlais entered into a Co-operation Agreement. Pursuant to the Business Combination, Dowlais shareholders will be entitled to receive for each share of Dowlais’ common stock: 0.0863 shares of new AAM common stock, 42 pence per share in cash (approximately $0.52 per share) and up to 2.8 pence (approximately $0.035 per share) of Dowlais fiscal year 2024 final dividend prior to closing. The transaction has been unanimously approved by the Boards of Directors of AAM and Dowlais. Following the close of the transaction, the combined company will be headquartered in Detroit, Michigan and will be led by AAM's Chairman and CEO. The transaction is expected to close by the end of 2025, subject to approval by both sets of shareholders, regulatory approvals, and satisfaction of customary closing conditions. See Note 4 - Long-Term Debt for additional detail regarding financing for the Business Combination. Acquisition of Tekfor Group On June 1, 2022, our acquisition of Tekfor Group (Tekfor) became effective and we paid a total purchase price of $94.4 million, which was funded entirely with cash on hand. Tekfor manufactures high-performance components, modules and fasteners, including traditional powertrain and driveline components (for both internal combustion and hybrid applications), and e-mobility components. Our acquisition of Tekfor has contributed to diversifying our geographic and customer sales mix, while also increasing our electrification product portfolio. The acquisition of Tekfor was accounted for under the acquisition method under Accounting Standards Codification (ASC) 805 - Business Combinations with the purchase price allocated to the identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities. The following represents the fair values of the assets acquired and liabilities assumed resulting from the acquisition (in millions):
| December 31, 2022
Total consideration transferred | $ | 94.4 |
Cash and cash equivalents | $ | 14.3 |
Accounts receivable | 33.7
Inventories | 46.3
Prepaid expenses and other long-term assets | 30.1
Deferred income tax assets | 5.0
Property, plant and equipment | 105.5
Total assets acquired | $ | 234.9 |
Accounts payable | 33.5
Accrued expenses and other | 28.1
Debt | 23.4
Postretirement benefits and other long-term liabilities | 41.9
Net assets acquired | $ | 108.0 |
Gain on bargain purchase of business | $ | 13.6 |
The gain on bargain purchase of business was primarily the result of macroeconomic factors at the time of acquisition such as the supply chain disruptions that impacted the automotive industry, including the conflict between Russia and Ukraine, the semiconductor supply shortage, and increasing input costs, including materials, freight and utilities. We finalized the valuation of the assets and liabilities of Tekfor in the first quarter of 2023 as we concluded the customary post-closing reviews associated with the acquisition. There were no adjustments to the purchase price allocation in the year ended December 31, 2023. Included in net sales and net income for the period from the acquisition effective date on June 1, 2022 through December 31, 2022 was $204.0 million and a net loss of $5.1 million, respectively, attributable to Tekfor. The 2022 net loss attributable to Tekfor included a one-time expense of approximately $4.0 million, net of tax, for the step-up of inventory to fair value. Unaudited Pro Forma Financial Information Unaudited pro forma net sales for AAM, on a combined basis with Tekfor for the years ended December 31, 2022 and December 31, 2021, were $5.95 billion and $5.50 billion, respectively, excluding Tekfor sales to AAM during those periods. Unaudited pro forma net income amounts for the years ended December 31, 2022 and December 31, 2021 were approximately $55 million and $15 million, respectively. Unaudited pro forma earnings per share amounts for the year ended December 31, 2022 and December 31, 2021 were $0.46 per share and $0.13 per share, respectively. Unaudited pro forma net income for the year ended December 31, 2021 includes a one-time gain of approximately $15 million associated with a Tekfor entity as a result of a favorable tax ruling in a non-U.S. jurisdiction. The unaudited pro forma net income amounts for the years ended December 31, 2022 and December 31, 2021 have been adjusted for approximately $4 million, net of tax, related to the step-up of inventory to fair value as a result of the acquisition, approximately $5 million, net of tax, for acquisition-related costs, and approximately $14 million for the gain on bargain purchase of business, which was not subject to tax. This resulted in a net reclassification of approximately $5 million from unaudited pro forma net income in 2022 into unaudited pro forma net income in 2021, as we are required to disclose the unaudited pro forma amounts as if the acquisition of Tekfor had been completed on January 1, 2021. The disclosure of unaudited pro forma net sales and earnings is for informational purposes only and does not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date for the periods presented, or which may be realized in the future. Pending Disposition of AAM India Manufacturing Corporation Pvt., Ltd. In October 2024, we entered into a definitive agreement to sell our commercial vehicle axle business and related assets in India (AAM India Manufacturing Corporation Pvt., Ltd.) to Bharat Forge Limited for a sales price of $65 million, subject to certain customary adjustments at closing. The sale is expected to close in the first half of 2025, subject to customary closing conditions, including the receipt of regulatory approvals. As such, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale, resulting in $58.1 million of assets and $24.4 million of liabilities classified as held-for-sale in our Consolidated Balance Sheet as of December 31, 2024. These amounts are classified entirely as current as we expect to complete the sale in the first half of 2025. Upon reclassification to held-for-sale in 2024, we recorded an impairment charge of $12.0 million to reduce the carrying value of this business to fair value less cost to sell. This impairment charge was primarily driven by approximately $30 million of accumulated currency translation adjustments that were included in the calculation of the carrying value of this business. The sale of AAM India Manufacturing Corporation Pvt., Ltd. did not qualify for classification as discontinued operations as the sale does not represent a strategic shift in our business that has had, or will have, a major effect on our operations and financial results. As such, no reclassification of the assets and liabilities as held-for-sale was required in our Consolidated Balance Sheet as of December 31, 2023.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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