U.S-based car parts maker Dana has made a bid for embattled engineering giant GKN.
A report in the FT says that Dana will offer $6bn for the drivetrain division and will consider opening a secondary listing on the London stock exchange.
GKN’s drivetrain business combined with Dana’s existing contracts would give shareholders 47 percent of the world’s biggest drive system supplier with annual sales of $14bn according to the paper.
Jim Kamsickas, Chief Exec of Dana was clear that the combination of the two firm’s strengths in road vehicle engineering was undisputable. “It would be impossible to poke a hole in this industrially” he said.
The new bid is in addition to the hostile offer to shareholders from Melrose Industries, previously reported on. The board of GKN has rejected the bid, but shareholders are currently considering it.
However, the Melrose bit is neither popular with the management, nor some key clients. Tom Williams, CEO of Airbus has been quoted as saying that it would be ‘impossible’ to work with the engineering company under a short-term business model.
“The industry does not lend itself to shorter term financial investment which naturally reduces R&D, budgets and limits vital innovation,” he told the Reuters news agency.
Lets hope this doesn’t come off. Not sure about the OE side of things but the UK aftermarket is a history of disasters when US companies in general and Dana in particular get involved. They have screwed up so many UK brands and companies.
A German buyer would be better. However, the city is awash with cash – let a UK institution invest in a UK engineering company.