UK engineering giant GKN is said to be at advanced stages of talks to buy the aerospace unit of Volvo.
According to a report in the UK’s Sunday Times, GKN could pay up to £800 million for Volvo Aero, which manufactures aircraft engines and components.
GKN has plants in Bristol and Cowes on the Isle of Wight. Its aerospace business, which manufactures aircraft components, is its second biggest division, with sales last year of £1.5 billion.
Part of GKN’s strategy is to expand in aerospace.
It was reported yesterday that GKN has put its wheels business up for sale, which could generate funds of around £130 million for the company.
Volvo said in November that it would sell its aerospace unit to focus on trucks and construction equipment. The unit currently accounts for less than one per cent of Volvo’s total sales.
Germany's MTU Aero Engines was also in talks to buy the business but according to reports, it dropped out of the running last month.
GKN has so far refused to comment on the speculation surrounding Volvo.
