British engineering group GKN has acquired Volvo Aero for £633m.
The announcement of the deal, which required GKN to take on £500m in debt, comes only two days after Boeing said it expects the size of the civil aviation aircraft fleet to double in the next 20 years.
Volvo Aero designs, engineers and manufactures components and sub-assemblies for aircraft engine turbines, and supplies most of the major aero-engine manufacturers in the civil aerospace sector.
Marcus Bryson, chief executive officer of GKN Aerospace and Land Systems, told The Engineer that he wanted to emulate the success GKN has witnessed with aerospace structures in aerospace engines. ‘The acquisition gives us an opportunity to deepen and strengthen our relationship with some of the engine guys,’ he said.
According to Bryson, GKN’s acquisitions have helped the company do a 180o shift away from the military aerospace market and towards the civil aerospace market.
‘If you were to go back six years and look at GKN Aerospace, 70 per cent of our revenues came from the US Military and only 30 per cent came from civil,’ said Bryson. ‘If you look at our business now it’s about 55 per cent civil and 45 per cent military.
‘My own view is that within the next two or three years — as some of the big civil programmes ramp up and come to market — our portfolio is probably going to be 75 per cent civil and 25 per cent military.’
Following the acquisition, GKN will be working on a number of projects with Volvo Aero, which will include implementing parts for the Airbus A320 and A350 XWB, in addition to the Boeing 787 and 747-800.
GKN’s share price was up 11.04 per cent to 207.20 at 1:25pm BST.