British aerospace and automotive manufacturer, GKN has announced plans to acquire the Dutch aerostructures company Fokker Technologies for €706m (US$776m).
This deal will consolidate GKN – and place it in a strong position in the aerospace industry – as the number two supplier for parts and components worldwide.
GKN currently generates the majority of its profits from automotive parts, however with the new acquisition, it will become a major supplier of large aerospace projects, such as the F-35 jet produced by Lockheed Martin.
Chief executive of GKN Aerospace, Kevin Cummings commented: “[Fokker] is an excellent business that fits well with GKN Aerospace.
“Strategically, this acquisition strengthens GKN Aerospace’s position as a market leader, enhances its global manufacturing footprint and adds new technology.
Fokker Technologies dates back to the beginning of the aerospace industry and produced some of the first commercial airframes.
In later years it was overtaken by newer and larger players, and was forced to declare bankruptcy in 1996.
Since then however, the company has made a strong comeback as a supplier of parts and components for aircraft. At the time of purchase, the company has a number of strong supplier contracts for new aircraft by Lockheed Martin and Airbus.
This business turnaround allowed the company to take in €756m (US$840m) in revenue in 2014.
Fokker is hoping the two companies can find increased success as a singular business entity into the future.
CEO of Fokker Technologies, Hans Büthker said: “The combination of GKN Aerospace and Fokker will create a world-leading, innovative multi technology aerospace company with a global footprint.
“GKN Aerospace and Fokker together have an impressive multi-technology portfolio for our customers. Fokker can benefit greatly from the scale, innovation and financial power of GKN.”
Post-acquisition, Fokker’s headquarters will remain in the Netherlands and there are no indications from GKN of any planned downsizing of their operations.
Markets initially responded positively to the deal, with GKN’s stock price jumping more than 5%, however over the last week a more cautious sentiment has caused these gains to be all but reversed.