GKN considers split to form two FTSE giants

InDUSTRIal giant GKn is considering splitting itself in two within the next few months.

The firm is examining a radical break-up plan that could create two separate FTSe-listed businesses for its aerospace and automotive arms.

GKn, which was founded more than 250 years ago in South Wales, designs and builds components for major aircraft, including the Boeing 787 Dreamliner, and most of the world’s car manufacturers.

analysts have long predicted a possible split, as there is little overlap in the manufacture of parts for aeroplanes and cars, while their supply chains have become increasingly specialised.

However, the promotion of aerospace executive Kevin Cummings as successor to chief executive nigel Stein, and Jos Sclater becoming finance director, has reignited speculation a major change is around the corner. GKn declined to comment.

But GKn’s pensions deficit could potentially stand in the way of the division.

In July the firm said it had closed its defined benefit pension scheme and that it would inject £250m to plug the deficit, which stood at £1.1bn.

The possible split comes just weeks after the company warned that annual profits would be only ‘slightly above’ 2016 after disclosing a £40m hit linked to legal claims and a £15m writedown. although it did not give further details, it said GKn aerospace north america will book the £15m charge at its alabama facility.