American Axle & Manufacturing Holdings Inc., the Detroit-based maker of drivetrain components with longtime roots to General Motors, is attracting preliminary interest from suitors including Melrose Industries Plc, people familiar with the matter told Bloomberg.
London-listed Melrose is weighing a combination of its GKN Automotive unit with American Axle, according to the people, who asked not to be identified because the information is private. A deal could help GKN Automotive build scale in the car-parts industry and gain a public listing in New York.
Shares of American Axle gained as much as 23 percent in New York trading Thursday, the biggest intraday gain in more than two years. They were up 16 percent to $10.57 in afternoon trading, giving the company a market value of about $1.19 billion.
American Axle has also had contact with other industry peers including BorgWarner Inc. and Dana Inc. to gauge their interest in potential tie-ups or asset deals, the people said. It’s unclear whether either party will pursue a transaction, the people said.
Deliberations are ongoing, and there’s no certainty they will result in a deal, the people said. Representatives for Melrose, BorgWarner and Dana declined to comment. A spokesperson for American Axle didn’t respond to emails and phone calls seeking comment.
American Axle has been a steady supplier of drivetrain components to carmakers for decades. But its business model faces pressure from the ongoing shift toward EVs by the likes of Ford Motor Co. and GM.
In May, American Axle denied reports that it was exploring a potential sale.