Friday, 9 March 2018

UK engineering giant GKN and Dana agree auto-engineering merger for $6.1bn

UK engineering giant GKN has agreed to merge part of its business with US company Dana, as it seeks to fend off a takeover bid from Melrose Industries.

The merger will combine GKN's Driveline division with US auto-engineer Dana in a deal worth $6.1bn (£4.4bn).

It comes as Melrose has a £7.4bn offer on the table to buy all of GKN.

But GKN said the Dana deal "provides significantly greater value" than Melrose's bid, which is subject to scrutiny by UK MPs and regulators.

Earlier this week, a cross-party group of MPs wrote to the Business Secretary, Greg Clark, saying the Melrose takeover should be blocked.
Either deal still needs to be signed-off by GKN shareholders, who will now have to assess the merits of the two alternatives.

The chairman of GKN, Mike Turner, said of the Dana merger: "This combination of GKN Driveline and Dana will create a US and UK led global market leader in vehicle drive systems.

"The synergies between these two businesses and our complementary product portfolios make this a great deal for GKN shareholders."

Under the terms of the proposed tie-up, GKN shareholders will end up with a 47.25% stake in the enlarged, US-listed group. FTSE 100-listed GKN will also get $1.6bn in cash from a merger.

Dana will also take on $1bn in pension liabilities and issue $3.5bn worth of shares to GKN investors.

BBC        News.