British engineering group GKN is considering splitting into two listed companies comprising its aerospace and auto component divisions, according to reports.
The company, which supplies components for Airbus and Boeing planes and carmakers including VW and Fiat Chrysler, is in the early stages of considering the plan, as the Sunday Times reported.
According to the newspaper, ‘the split has long been mooted by analysts but the promotion of two senior executives has accelerated thinking’.
Aerospace executive Kevin Cummings was last month named as successor to GKN chief executive Nigel Stein, and its strategy chief, Jos Sclater, was promoted to finance director, replacing Adam Walker.
In 1902, Guest, Keen & Co. took over Nettlefolds to create the company GKN, and earlier of the company supplied cannonballs to the British army throughout the Napoleonic wars.
As reported by the Sunday Times, today there is little overlap in the manufacture of parts for aeroplanes and cars, with supply chains having become ever more specialised.
A number of hurdles stand in the way of any split, not least the historic pensions deficit and the size of the businesses. Nonetheless, it is understood a break-up could happen within months.
Reportedly, the aerospace division has been boosted by acquisitions such as the £500m deal for Dutch company Fokker two years ago.
The Sunday Times stated that GKN is believed to be hunting for more deals that would bulk up aerospace further and is likely to add its powder metallurgy business — which makes parts from powdered metal — to the division.
Its driveline arm was trying to expand into electrically powered vehicles, and may also look to expand before standing on its own.
GKN declined to comment.