American Axle Manufacturing Holdings Inc. agreed to buy Metaldyne Performance Group Inc., combining the two Michigan auto suppliers in a cash-and-stock deal valued at roughly $1.6 billion.

Under the terms of the agreement, American Axle agreed to swap $13.50 a share in cash and 0.5 shares of its stock for each share of Metaldyne. The deal values Metaldyne at $21.81 a share, a 52% premium to Wednesday's closing price of $14.50. The deal also includes the assumption of $1.7 billion in net debt.

The transaction, subject to regulatory and shareholder approvals, is expected to close in the first half of 2017.

American Axle also reported earnings for the third quarter Thursday. Chief Executive David Dauch said the results, generally in line with expectations, reflected solid production volumes and performance from global manufacturing operations.

The company reported a profit of $61.7 million, up from $60.9 million in the year-ago period. On a per-share basis, earnings were flat at 78 cents.

Sales rose to $1.01 billion from $971.6 million. Analysts polled by Thomson Reuters expected per-share profit of 77 cents a share on $1.01 billion in revenue.

American Axle and Metaldyne shares were inactive premarket.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

November 03, 2016 07:55 ET (11:55 GMT)

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