American Axle & Manufacturing Holdings Inc. (NYSE: AXL) has announced the acquisition of a fellow Michigan-based company with a strong presence in Indiana. The deal involves $1.6 billion in cash and stock and the assumption of $1.7 billion of Metaldyne Performance Group Inc.’s (NYSE: MPG) debt.

AAM has operations in Fort Wayne and Rochester and MPG’s locations include North Vernon, Fremont and Bluffton. Last month, MPG announced a $31 million investment into its North Vernon plant, a move officials said would bring more than 125 jobs to Indiana by 2019.

AAM says the acquisition is expected to bring between $100 million and $120 million in annual savings from synergies between the combined organization. The global company features powertrain, drivetrain and driveline product lines.

Chief Executive Officer David Dauch says "AAM’s transformational acquisition of MPG brings together two complementary Tier 1 organizations to create a company with greater scale and increased diversity across products, customers and end markets. MPG’s expertise in complex, highly-engineered powertrain components and its global footprint will be tremendous assets to AAM."

The resulting company is anticipated to have nearly $7 billion of annual sales. Dauch will remain chairman and CEO of AAM. The headquarters will stay in Detroit. AAM currently has around 13,000 employees and MPG 12,000.

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