The British company, which also makes automotive parts, plans to raise 140 million pounds in a share sale to help pay for the purchase of Volvo Aero, it said in a statement. The stock rose as much as 13%, the most in three years.
Chief Executive Officer Nigel Stein said Feb. 28 that he would remain disciplined on what he would pay for acquisitions and that GKN had looked at “a lot of things over the years.” Source: GKN Plc via Bloomberg
GKN is broadening a product range that already includes some engine components as airliner orders accelerate, with the deal taking aerospace sales to about 37% of the total, Chief Executive Officer Nigel Stein said on a conference call. For Volvo, the second-biggest truckmaker, the disposal marks the biggest structural shift since its car unit was sold in 1999.
“This takes GKN into some new areas and increases the aerospace percentage,” said Nick Cunningham, an aviation analyst at Agency Partners in London. “It also raises the question of whether GKN is in the process of repositioning itself and will eventually become almost a pure aerospace company.”
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