Airbus SE to snap business relations with GKN post Melrose acquisition

The biggest client of GKN Plc, a UK based multinational automotive & aerospace components firm, Airbus SE has raised concerns over the former’s GBP 8 billion hostile acquisition bid made by Melrose industries. For the record, Airbus represented 20% of GKN’s aerospace sales in 2017. Tom Williams, CEO of Airbus, has declared that the firm may severe ties with GKN if it entered into an acquisition agreement with Melrose. Earlier this month, the engineering firm had actually rejected the takeover bid of Melrose stating that it undervalued the firm.

Some of the key officials of Airbus have stated that the aerospace & aviation industry needs a long-term investment, which helps in promoting innovation as well as R&D activities. They further stated that with Melrose acquiring GKN, it will be unable to offer the firm any new projects. Even the chairman of GKN, Mike Turner, has clarified the stand taken by Airbus with regards to Melrose implementing a short-term business model and lacks experience, which can majorly impact its investors and customers.

According to reliable sources, GKN is speculated to move ahead with its business restructuring, which also includes the integration of its automobile business with the U.S. based Dana Incorporation in an agreement worth USD 6.1 billion. BBC has reported that GKN is resisting the hostile takeover by Melrose by offering around GBP 2.5 billion to its stakeholders.

However, Christopher Miller, the chairman of Melrose, has asserted that the firm believes in long-term capital investments. He further added that the Melrose will explain to all the shareholders and clients of GKN as to how the acquisition will help in promoting GKN’s business further.

Reportedly, it is being speculated that GKN’s new business strategy of short-term business model will not be able to fulfill the lasting demands of its extensive consumer base.