Melrose hires bankers to sell GKN unit
Melrose has hired bankers to sell off a unit of GKN, the British engineering stalwart it paid £8bn to takeover earlier this year.
According to Sky News, Melrose has appointed investment bank RW Baird to explore a sale for off-highway powertrain, a business that makes gearboxes and driveshafts for vehicles in the mining and agriculture sectors.
Read more:
Melrose is looking to raise about £350m from its sale of the powertrain business.
Melrose had previously appointed investment banks Jefferies and Rothschild to handle the auction of GKN’s powder metallurgy business which could sell for £2bn.
Melrose targeted GKN earlier this year in an acrimonious £8bn hostile takeover with the management of GKN who had urged shareholders to reject the bid.
Melrose, which announces its half-year results tomorrow, prevailed with 52.4 per cent of GKN shareholders accepting its cash-and-shares offer in March.
Read more: Transocean buys deepwater rival Ocean Rig in $2.7bn deal
As part of its takeover defence GKN drew up plans to sell both the powder metallurgy and off-highway powertrain businesses, deeming them non-core.
Powder metallurgy generated £1.17bn in revenue and £177m in core earnings in 2017, according to the defence document GKN published earlier this year. The powertrain unit had sales of £376m and £38m of earnings.
Melrose declined to comment,.