Melrose fires starting gun on GKN break-up

TURNAROUND group Melrose Industries has started the break up of GKN with the sale of one of its business units.

The FTSE 100 company, which acquired GKN in an £8.1bn hostile takeover last March, said it expects to complete the sale of Walterscheid Powertrain Group to US private firm One Equity Partners by the summer.

The unit, previously known as GKN Off-Highway Powertrain, makes gearboxes and driveshafts for mining and farming vehicles. Previous reports suggested Melrose had put a price tag of £350m on the unit, but it did not disclose the sale price.

Melrose subsidiary Fokker Aerospace, which makes aircraft parts, has sold its 44pc interest in Societe Anonyme Belge de Constructions Aeronautiques to majority shareholder, Dassault Belgique Aviation.

Melrose, whose four bosses were each paid more than £42m each in 2017, hopes to raise a combined £200m from the stake and unit sales.

The company won its bitter hostile takeover battle for GKN after investors with 52pc of the shares backed the deal. It pledged to streamline the business and make it more efficient.

Late last year Melrose fired the starting gun on GKN’s break-up by planning a sale of its powder metallurgy business, which makes car and industrial components from powdered metal, for £1.6bn.

Analysts are hoping for an update on this sale in Melrose’s 2018 annual results today.