Airbus’s largest supplier GKN loses out in £8.1bn takeover battle
Business turnaround specialist Melrose has declared victory in its £8.1bn hostile takeover of UK engineering firm GKN – the largest supplier to Airbus.
GKN the 259-year-old engineering giant supports almost all Airbus aircraft programmes with products ranging from advanced composite and metallic airframe and engine structures to high-performance cockpit and cabin transparencies.
Airbus warned last week it would be “practically impossible” to give new business to engineering giant GKN if it was bought by Melrose.
Tom Williams, Airbus’s chief operating officer at its commercial aircraft division, said:
“The nature of our industry is one that requires a commitment to long-term investment and strategic vision.
“The industry does not lend itself to shorter term financial investment which naturally reduces R&D budgets and limits vital innovation.
“It would be practically impossible for us to give any new work to GKN under such ownership model when we don’t know who will be the long-term investor.”
“It’s game over, no recount. Done.” The board and management of GKN accept defeat and will recommend all shareholders now accept the Melrose offer. Legal advice is govt does not have the power to block this deal.
— Joel Hills (@ITVJoel) March 29, 2018
Melrose said it had the support of 52.4% of GKN investors.
Christopher Miller, chairman of Melrose, said:
“We are delighted and grateful to have received support from GKN shareholders for our plan to create a UK industrial powerhouse with a market capitalisation of over £10bn and a tremendous future.”
The UK’s aerospace and defence trade association ADS said the company should now reflect on concerns raised in recent weeks and offer binding commitments to address them.
ADS Chief Executive Paul Everitt said:
“This is a worrying time for GKN, its employees, pensioners, suppliers and customers. Now that shareholders have voted in favour of accepting their bid, Melrose should talk to these important stakeholders and reflect on issues and concerns that have been raised during recent weeks.
“Melrose should then formally respond and be prepared to offer the legally binding commitments allowed within current legislation.
“It will be for Government to assess whether these are sufficient or whether the bid should be referred to the Competition and Markets Authority, under the powers outlined by the Business Secretary earlier this week.
“GKN is an important part of the UK industrial landscape and it is important that its owners continue to invest for the long-term and support high value jobs both directly and throughout its UK supply chain.”
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