GKN is negotiating with the Italian firm of Finmeccanica to dispose of its 50% shareholding in AgustaWestland, the Anglo-Italian helicopter manufacturer which the companies jointly established in 2001.
Finmeccanica will acquire GKN’s interests in the joint venture for a cash consideration of £1,063.5 million. This includes the transfer of the property assets of the Yeovil, UK site.
Kevin Smith, Chief Executive of GKN plc, said that GKN would use the proceeds of the sale to reduce debt and to continue the strategic development of the Group, including further selective acquisitions in automotive and aerospace.
The consideration of £1,063.5 million includes a sum of £35 million which will be held in escrow and will be repaid to Finmeccanica in the event that the contract for Future Lynx is not placed by the UK Ministry of Defence by the end of 2005.
GKN and Finmeccanica expect to enter into definitive agreements in the near future and hope to achieve completion of the transaction, which will be subject to GKN shareholder approval and regulatory approvals, by the end of the year.