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.
That has led to fears that GKN could end up in foreign ownership, and that jobs could be at risk, prompting concerns from unions, government and firms that GKN supplies.
Melrose’s proposed deal was voted on by GKN shareholders earlier today, with 52.43% voting in favour. Melrose chairman Christopher Miller said: "We are delighted and grateful to have received support from GKN shareholders for our plan to create a UK industrial powerhouse.