Melrose Industries PLC, UK, has announced plans to separate the GKN Powder Metallurgy and GKN Automotive businesses from the Melrose Group by way of a demerger of shares in a new holding company (DemergerCo) to Melrose shareholders. The move will result in two separately listed companies, DemergerCo and Melrose Industries, with Melrose retaining ownership of GKN Aerospace. Subject to shareholder approval, the demerger is planned to take place in the first half of 2023.
DemergerCo is expected to become an independent automotive platform, owning both GKN Automotive and GKN Powder Metallurgy, and will act as an independent group with its headquarters in London. The company will seek admission to listing on the premium segment of the Official List and to trading on the Main Market of the London Stock Exchange. It will have a dual strategy of profitable organic growth, as well as targeted M&A in the automotive sector.
The internal work under Melrose ownership to position the businesses to achieve stated margin targets for GKN Automotive and GKN Powder Metallurgy are expected to be completed this year. Simon Peckham and Geoffrey Martin will be executive directors of DemergerCo, as well as the remaining Chief Executive and Group Finance Director of Melrose. The current Chief Executive and Finance Director of GKN Automotive, Liam Butterworth and Roberto Fioroni, will take up equivalent roles for DemergerCo.
“Since acquiring GKN in 2018, we have reinvigorated each business to achieve its potential,” stated Justin Dowley, chairman of Melrose Industries PLC. “The proposed demerger now gives each an exciting opportunity to individually grow shareholder value through organic growth and acquisition in both platforms. Meanwhile, we remain on track to meet our full year 2022 expectations with full inflation recovery and providing good momentum for the intended demerger in the new year.”