British engineering giant GKN, whose Driveline division is one of the world’s largest automotive suppliers, is set to change ownership after investors backed an £8.1 billion hostile takeover by Melrose Industries.
Redditch-based GKN has nearly 60,000 employees worldwide, and its Driveline division produces automotive components for major car firms including BMW, Volkswagen and Volvo. The automotive division generated revenue of £9.7 billion in 2017.
The future of GKN, which also has major aerospace and freight services divisions, has been in doubt since it issued a string of profit warnings last year and launched a review into its US aerospace arm. GKN bosses developed a restructuring plan that would have involved splitting out Driveline, and merging it with American car components firm Dana to create a new company, which GKN would take a 47% stake in.
At the same time, British-based Melrose Industries, which describes itself as a ‘turnaround specialist’ launched a bid to takeover GKN. Melrose has a strategy of buying manufacturing businesses, and restructuring them, before selling them off within five years.