Engineering group GKN plc continues to fend off the hostile takeover launched in January by Melrose Industries, but it has proceeded to negotiate a separate resolution with Dana Corp. to acquire its GKN Driveline business.
In the agreement struck with Dana, GKN shareholders would get stock in a new group valued at $3.5 billion, plus $1.6 billion of cash, and Dana would assume $1 billion of GKN debt. Dana shareholders will hold about 52.75% of shares in the renamed Dana Plc.
Dana also agreed to list its shares on both the New York Stock Exchange and London Stock Exchange.
If fully executed, the agreement would expand the Dana driveline product range and its automotive market share, while GKN would become a more “pure play” aerospace business.
Dana is an Ohio-based designer and manufacturer of the passenger vehicle, commercial truck, and off-highway markets, as well as industrial and stationary equipment applications.
The GKN Driveline division designs and manufacturers standard and electric driveline systems for passenger vehicles. The larger group designs and manufactures engineered aerospace and automotive parts, including forgings.
In February, the new GKN management team put its powder-metallurgy business up for sale in the first wave of a restructuring program aimed at improving its revenues and financial performance. It indicated other business lines would be considered for sale too, including GKN Driveline’s Wheels, Cylinder Liners and Off-Highway Powertrain businesses. It said it plans to continue developing its GKN Aero Additive Manufacturing, Driveline China, and eDrive Systems business.