GKN completes £177m German disposal deal
MIDLANDS engineering group GKN has completed the £177m disposal of its German land systems operation, Stromag.
The Redditch-based group first revealed the sale of the operation to US-based Altra Industrial Motion in October.
The deal was for €184m (£164m) in cash and the transfer of debt-like obligations of approximately €14m (£13m); representing a total value of €198m (£177m).
Completion of the transaction had been expected during the first quarter of 2017 subject to a workforce consultation and in France and Germany and merger control clearance in Germany.
However, the clearances came sooner than expected, allowing the disposal to be completed on December 30.
Confirmation of the sale completion came in a brief update to the markets.
Stromag, based in Unna, near Dortmund, supplies brakes, clutches and highly flexible couplings to the agricultural, construction, industrial and renewable energy markets. Total sales in 2015 were €131m (£117m).
However, in contrast to its strong automotive (Driveline) and aerospace divisions, GKN’s Land Systems division has been undergoing a difficult period.
Organic sales were down 6% in 2015 due to challenging conditions in the agricultural and construction equipment markets.
The group has therefore opted to plough capital into its core aerospace and automotive businesses in an attempt to boost the group’s overall performance.
