GKN confirms plans for sale of Powder Metallurgy business

February 14, 2018

GKN confirms plans for sale of Powder Metallurgy business

Anne Stevens, GKN Chief Executive (left) and Jos Sclater, GKN Finance Director (right) (courtesy GKN plc)

 

GKN plc has confirmed that it will look to divest GKN Powder Metallurgy, comprising GKN Sinter Metals and Hoeganaes, within the next 12-18 months as part of its new business strategy to transform the company, including the sale of non-core segments. The new strategy announcement comes in response to Melrose PLC’s widely-reported takeover bid in January 2018. After an initial proposal from Melrose to acquire GKN was rejected by GKN’s Board, both companies have launched campaigns to convince GKN shareholders of their respective plans for the group.

GKN stated that there are three components to its new strategy: the company plans to deliver distinct strategies for different product segments through rigorous capital allocation and focused performance targets; establish a delivery culture based on greater accountability, capability and pace, supported by aligned incentives; and separate operationally now and formally when it maximises shareholder value – with the operational separation of GKN Aerospace and Driveline already underway.

As part of a plan to divest non-core segments, GKN group will also look to sell GKN Driveline’s Wheels, Cylinder Liners and Off-Highway Powertrain businesses, while identifying plans to grow Driveline China and further develop its eDrive Systems business. GKN Aero Additive Manufacturing was also identified as a product segment positioned for growth.

The Board stated that it is targeting up to £2.5 billion cash return to shareholders over the next three years, with a significant portion of this expected to come from divestments executed in the first 12-18 months, including the sale of Powder Metallurgy. The group will also enact a ‘progressive dividend policy’ targeting an average pay-out of 50% of free cash flow to its shareholders over the period of 2018-2020.

Anne Stevens, Chief Executive of GKN, stated, “The new strategy brings clarity, accountability and focus to GKN’s world-class businesses and will allow the group to attain world-class financial performance. GKN has great technologies and great people. We have strong market positions and have delivered good growth, with management revenues last year of over £10 billion.”

“But too often we pursued growth at the expense of returns,” she continued. “This will no longer be the case. The new strategy brings discipline, both financial and operational.” Stevens went on to state that the company expects the new strategy to generate significant cash for shareholders in the short term, and meaningful sustainable cash flows over the mid- to long-term. “We expect to deliver £340 million of recurring annual cash benefit from the end of 2020,” she stated.

www.gkn.com

 

 

Read Metal AM magazine‘s article on ‘GKN Aerospace: The development of Additive Manufacturing at a global Tier 1 aerospace supplier’ (Metal AM Winter 2016, Vol. 2, No. 4). 

 

Metal AM magazine visited the GKN Aerospace facility at Filton, Bristol, UK, to discover the business’s global development activities in Additive Manufacturing (AM) and to view the company’s on-site AM centre. The article offers an outline of the company’s  activities and future aspirations in the field of AM for aerospace applications. 

 

Download the full issue here.

Latest Industry News

Download the latest issue of PM Review

Our latest issue is now available to download in PDF format, free of charge.

As well as an extensive Powder Metallurgy industry news section, this 92-page issue includes the following exclusive articles and reports:

  • Industry 4.0 and the Powder Metallurgy industry: Challenges and opportunities ahead
  • New opportunities for master alloys: Ultra-high pressure water atomised powders
  • Euro PM2018: Powder Metallurgy processing by hot pressing technologies
  • Hagen Symposium: How Powder Metallurgy can meet the needs of a changing market
  • More information

Industry News

E-newsletter

Sign up to our free e-newsletter, sent weekly to industry professionals around the world. We'll also let you know each time a new issue of PM Review magazine is available.

Subscribe for a FREE digital magazine

PM Review is the leading international magazine for the Powder Metallurgy industry.
Published four times a year, it is available as a free download or through a print subscription

Connect with us

Powder Metallurgy:The original net-shape production process

Powder Metallurgy components are relied upon by a wide variety of manufacturing industries, from automotive to power tools, household appliances, chemical engineering, filtration and more.

The main reason for the technology’s success is its cost-effectiveness at producing high volumes of net-shape components, combined with its ability to allow the manufacture of products that, because of the production processes, simply cannot be manufactured by other methods.

To discover more about how the technology has revolutionised component production, browse our Introduction to Powder Metallurgy.

Latest industry news