Plans to combine the automotive and off-highway drive systems operations of Britain's GKN engineering group with Dana appear to have been scuppered by a GKN shareholder vote today in favor of a hostile take-over by UK business turnaround specialist Melrose.
Acknowledging the outcome of the vote and its expected impact on the proposed deal, James Kamsickas, Dana president and CEO, said: "We are, of course, disappointed by today's outcome and continue to believe Dana would be the best owner and operator of GKN Driveline.
"This has always been an opportunity, not a required or critical asset," he emphasized. "Dana is a strong, thriving company, and we will continue our focus on the execution of our enterprise strategy, delivering for customers and remaining responsible stewards of our shareholders' capital."
Melrose Industries won control of GKN in the face of significant interventions by major shareholders, customers in the aerospace sector who want long-term stability in their supply chain, and from the British government, winning the support of a slim majority of investors.
GKN planned to sell its Driveline division, which includes Walterscheid off-highway power drives and linkage systems, as well as other operations considered non-core such as the off-highway wheels businesses.
Group managers say they will now work with Melrose to ensure the success of the new company, though how long they will remain involved given Melrose management's swinging criticism of their tenure of the UK's largest engineering group remains to be seen.
Christopher Miller, chairman of Melrose, said: "We are delighted and grateful to have received support from GKN shareholders for our plan to create a UK industrial powerhouse with a market capitalization of over £10 billion and a tremendous future."
Off-highway has been a declining sector for GKN as other parts of the business – notably aerospace – have grown. In 2016, the group disbanded its GKN Land Systems division in a £14 million restructuring.
More on GKN ... Farm Equipment interviewed Jan Faassen, Sales Director, GKN Off Highway Powertrain and GKN Walterscheid in a podcast recording at Farm Equipment offices in late December 2017. You can listen to his description of GKN's place in farm machinery in North America here at https://bit.ly/2pRcPR8. The 10-minute interview with Faassen -- part of the "Ag Entrepreneurs" podcast series -- begins at the 25:10 mark of the recording with Gregg Sauder of 360 Yield Center.