Melrose Industries Plc will split its GKN automotive business into a separate unit, unraveling part of the politically controversial hostile takeover it made in 2018.
(Bloomberg) —
Melrose Industries Plc will split its GKN automotive business into a separate unit, unraveling part of the politically controversial hostile takeover it made in 2018.
The new group, to be headquartered and listed in London, will seek acquisitions in the rapidly changing car industry, manufacturing investor Melrose said in a statement Thursday.
Shares in Melrose initially jumped more than 5% as the market opened, but soon pared gains and were trading 1% higher at 8:30 a.m.
Melrose won control of GKN Plc in 2018 after investors holding a majority of the UK engineering company’s stock accepted its £8.1 billion ($9.3 billion) hostile takeover offer. Before that, GKN had considered selling its powder metallurgy business as part of a broader plan to raise cash and reward shareholders as it sought to fend off Melrose’s bid.
At the time, Melrose’s takeover attracted criticism from politicians and unions concerned about buyout groups targeting British industrial assets.
The new company will effectively become an automotive platform, owning both GKN Automotive, which supplies driveline technologies, and GKN Powder Metallurgy, a maker of metal powder and precision powder metal parts for the automotive and industrial sectors, the company said.
Melrose will keep its aerospace unit.
(Updates with share price movement in third paragraph)
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