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Metaldyne, Asahi Tec Alter Merger Terms

Nov. 28, 2006
Debtholders due to get $48 million more; stockholders will take less

November 28, 2006 — Metaldyne Corp. and Asahi Tec have amended the terms of their pending merger in response to demands by two of Metaldyne's largest debt holders. In late August, Metaldyne agreed to be acquired in a $1.2-billion takeover by the Japanese company in a bid to form a new global manufacturer of engineered automotive components. Metaldyne manufactures parts of powertrain and chassis systems; Asahi Tec produces ductile-iron and aluminum castings for components supplied to automotive, truck, and construction equipment builders. It also produces aluminum automotive wheels.

The partners now are aiming to seal the takeover by January 15.

Metaldyne states it now expects to pay approximately $48 million in consent fees to noteholders, and the terms of the merger agreement have been adjusted to reflect these costs, and the impact of recent production cuts by Metaldyne's largest customers. Also, the merger consideration that would have been payable to Metaldyne's common stockholders and series B preferred stockholder has been reduced.

The revised agreement also increases the amount of equity Asahi Tec will contribute to the transaction, from a maximum of $175 million to $200 million.

Tim Leuliette, Metaldyne chairman and CEO, stated: "Metaldyne and Asahi Tec remain committed to combining and realizing value for their respective stakeholders. This transaction makes sense strategically, technically and tactically. We intend to move forward quickly to close the merger."