On February 3, 2026, we completed our previously announced acquisition of Dowlais Group plc whereby we acquired the entire issued share capital of Dowlais (the Business Combination). Pursuant to the Business Combination, Dowlais shareholders received for each Dowlais ordinary share: 0.0881 shares of new Dauch Corporation common stock and 43 pence per share in cash (approximately $0.59 per share as of the closing date), resulting in the issuance of approximately 117 million shares (and an increase in authorized shares from 150 million shares to 375 million shares) and a total purchase price of approximately $1.7 billion.

Dowlais is a global leader in the production of sideshafts, propshafts, all wheel drive (AWD) systems and advanced differentials, as well as sintered metal components and powdered metal and related additives. The Business Combination significantly contributes to the diversification of our global customer base and geographical footprint, and allows us to achieve greater cost competitiveness through increased size and scale.

The aggregate cash consideration for the Business Combination was financed using (i) a portion of the net proceeds from the issuance in October 2025 by Dauch of $850 million of 6.375% senior secured notes due 2032 and $1,250 million of 7.75% senior unsecured notes due 2033 and (ii) borrowings by Dauch of $835 million on an incremental Tranche C term facility. See Note 5 - Long-Term Debt for additional detail regarding financing for the Business Combination.

The Business Combination was accounted for using the acquisition method under Accounting Standards Codification (ASC) Business Combinations (ASC 805) with the purchase price allocated to identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities.


(in millions)	February 3, 2026
Cash consideration	$	791.3
Share consideration	933.4
Total consideration transferred	$	1,724.7
Fair value of Dowlais noncontrolling interests	19.3
Total fair value of Dowlais	$	1,744.0

Cash and cash equivalents	$	459.7
Accounts receivable	656.8
Inventories	538.4
Property, plant and equipment	2,706.4
Investments in equity-method affiliates	883.7
Prepaid expenses and other long-term assets	569.1
Total assets acquired	$	5,814.1
Accounts payable	784.1
Accrued expenses and other	785.6
Deferred income tax liabilities	340.5
Long-term debt	1,876.9
Postretirement benefits and other long-term liabilities	794.0
Net assets acquired	$	1,233.0
Goodwill	$	511.0

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount recognized as goodwill, is based upon estimated information and is subject to change within the measurement period. Under the guidance of ASC 805, the measurement period is a period not to exceed one year from the acquisition date during which we may adjust estimated or provisional amounts recorded during purchase accounting if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. Measurement period adjustments are recorded in the period identified with an offsetting entry to goodwill. Any adjustments to amounts recorded in purchase accounting that do not qualify as measurement period adjustments will be included in earnings in the period identified. In the second quarter of 2026, we recorded measurement period adjustments that were primarily related to deferred tax liabilities, resulting in an increase in deferred tax liabilities of approximately $43.0 million.

The primary areas of the preliminary purchase price allocation that are not finalized relate to the fair value of property, plant and equipment, as well as deferred income tax assets and liabilities, and contingent liabilities. The fair values of the assets acquired and liabilities assumed are based on our preliminary estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that these preliminary estimates provide a reasonable basis for estimating the fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of amounts.

Goodwill resulting from the Business Combination is attributable to the assembled workforce of Dowlais, anticipated synergies and economies of scale from which we expect to benefit as a combined entity, as well as the impact of net deferred tax liabilities established on the opening balance sheet. None of the goodwill is expected to be deductible for tax purposes.

Included in net sales and net loss attributable to Dauch for the period from the Business Combination completion date on February 3, 2026 through June 30, 2026 were approximately $2,411 million and a loss of $50 million, respectively, attributable to Dowlais. The loss of $50 million includes approximately $30 million, net of tax, attributable to the step-up of Dowlais inventories to fair value in purchase accounting and the expense associated with the subsequent sale of these inventories.

Unaudited pro forma net sales for Dauch, on a combined basis with Dowlais for the six months ended June 30, 2026 and June 30, 2025, were $5,825.8 million and $5,749.2 million, respectively, excluding sales between Dauch and Dowlais during these periods. Unaudited pro forma net loss amounts for the six months ended June 30, 2026 and June 30, 2025 were a loss of approximately $32.4 million and a loss of approximately $92.5 million, respectively. These pro forma amounts have been calculated after applying Dauch's accounting policies and converting the historical financial statements of Dowlais from International Financial Reporting Standards (IFRS) to U.S. GAAP. The results primarily reflect depreciation adjustments relating to the fair value step-up of property, plant and equipment, incremental interest expense as a result of the financing associated with the Business Combination and the impact of the step-up of inventory to fair value.

The unaudited pro forma net loss amounts for the six months ended June 30, 2026 and June 30, 2025 have been adjusted by approximately $38 million related to the pre-tax step-up of inventory to fair value as a result of the Business Combination, and approximately $54 million in pre-tax acquisition-related costs. This adjustment resulted in a reclassification of approximately $73 million, net of tax, from unaudited pro forma net loss for the first six months of 2026 into pro forma net loss for the first six months of 2025, as we are required to disclose the unaudited pro forma amounts as if the Business Combination had been completed on January 1, 2025.

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 Business Combination been completed on the assumed date for the periods presented, or which may be realized in the future.

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. The sale of AAM India Manufacturing Corporation Pvt., Ltd. was completed in July 2025 and 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. For the three and six months ended June 30, 2025, we recorded an impairment charge of $8.0 million to reduce the carrying value of this business to fair value less costs to sell.