The State Administration for Market Regulation (SAMR), China’s primary market regulator, has granted conditional approval for the U.S.-based American Axle & Manufacturing Holdings (AAM) to acquire a stake in British automotive supplier Dowlais Group. This decision represents a critical milestone for the $1.44 billion transaction. China was the final major jurisdiction required to clear the deal, following earlier unconditional approvals from the European Union and the United States.
The regulator’s review focused specifically on the potential impact on competition within China’s markets for automotive power transmission units and rear-wheel-drive modules. Given that both American Axle and Dowlais are leading global suppliers of driveline systems—essential components for vehicle safety and stability—the SAMR expressed concerns that a combined entity could exert disproportionate market influence over domestic manufacturers and consumers. This is particularly significant given that Dowlais’ subsidiary, GKN Automotive, maintains a dominant presence in China through its Shanghai GKN Huayu Driveline Systems (SDS) joint venture, which reportedly holds a 40% share of the nation’s constant velocity driveshaft market.
To address these antitrust concerns, the approval is contingent upon four specific behavioral undertakings committed to by both companies. First, the combined entity must supply products on fair, reasonable, and non-discriminatory (FRAND) terms to all Chinese customers. Second, downstream customers must be guaranteed ongoing access to product development and collaborative engineering opportunities to ensure domestic innovation is not stifled. Third, the companies are required to honor all existing supply contracts without modification. Finally, American Axle and Dowlais must maintain stable pricing and are prohibited from unreasonably refusing requests for contract renewals.
The SAMR stated that these remedies are designed to preserve a level playing field in China’s rapidly evolving automotive industry, especially as the sector shifts toward electric and hybrid vehicle technologies. With the satisfaction of the Chinese antitrust condition, the companies are now proceeding toward a final court hearing on January 30. The acquisition is expected to officially close on February 3, 2026, creating a global automotive giant with approximately $12 billion in annual revenue.