American Axle & Manufacturing (AAM) has agreed to sell its Tonawanda Forge operations to a third party, who will then lease the facility to FormTech Industries. As part of a broader agreement, AAM exchanged its hub and spindle forging business for FormTech’s differential gear, hypoid pinion and ring-gear forging businesses. AAM also made a cash payment to FormTech in order to compensate for the difference in value between the businesses exchanged. FormTech, a suburban Detroit company that makes forged-metal components, plans to operate out of the Tonawanda Forge, which AAM had scheduled to close, possibly by the end of the year

As part of the deal, the parties exchanged certain direct and indirect inventories, fixed assets and tooling related to the exchanged businesses. AAM also acquired FormTech’s 50,000-square-foot manufacturing facility in Ft. Wayne, Ind. AccuGear Inc., a newly formed AAM subsidiary, will produce net-shaped differential gears from the site.