GKN agrees £300m acquisition of German AWD business
GKN has announced it has agreed to acquire the German all-wheel-drive components businesses of Getrag in a deal which could be worth up to £300m.
The move is designed to strengthen the group’s position in both the AWD sector and the development of electric vehicle and hybrid technology.
The businesses being acquired, which are controlled by the Hagenmeyer family, comprise Getrag Driveline Products, a joint venture with Dana Corporation, based in the United States, and Getrag All Wheel Drive, a joint venture with Dana Holding Corporation and Volvo, based in Sweden.
The core business of Getrag Driveline Products is the Tier 1 supply of geared driveline products, namely Power Transfer Units (PTU) and Rear Drive Units (RDU) for AWD vehicles, along with Final Drive Units (FDU) for high performance rear wheel drive vehicles.
The business is also geared towards the future supply of transmission and axle products for hybrid and electric vehicle drivetrains.
GKN said Getrag Driveline Products, which will be integrated into Birmingham-based GKN Driveline, was an excellent fit with GKN’s existing range of products and technology.
It said with operations in the United States and Europe, Getrag Driveline Products had a
product, manufacturing and customer footprint that is complementary to GKN’s own geared product business, which is predominantly based in Asia.
The combined businesses will be the leading global player in AWD driveline products with a strong customer base and product portfolio.
Nigel Stein, chief executive of GKN Driveline, said: “This acquisition is a significant step forward for Driveline, accelerating our strategy for growth in AWD systems and hybrid/electric drivetrains.
“Production of AWD vehicles is forecast to grow at above market rates reflecting increasing demand globally for crossover vehicles and compact SUVs. Combining our engineering and technology resources will strengthen our ability to provide customers with leading-edge technology, fuel-efficient solutions and to develop next generation drivelines.”
As part of the overall transaction, GKN is also acquiring an exclusive licence, principally for Europe and the Americas, to Getrag’s electric drivetrain technology for use in electric and certain hybrid vehicles.
The acquisition cost comprises a cash consideration of £283m for the equity at closing together with further deferred consideration of up to £12m depending on Getrag Driveline Products’ success in achieving future business awards.
Presently Getrag Driveline Products has net cash of approximately £15m and therefore the current enterprise value, including the deferred element, is £280m.
The deal is expected to complete in September subject to customary conditions and necessary regulatory approvals. The acquisition will be funded from the Group’s existing resources.
