UK engineering company GKN has agreed to acquire the all-wheel-drive (AWD) components businesses of Germany’s Getrag.
The businesses being acquired are known as Getrag Driveline Products and consist of Getrag Corporation—a joint venture with US-based Dana Corporation—and Getrag All Wheel Drive, a joint venture with Dana Holding Corporation and Sweden’s Volvo.
Getrag Driveline Products’ core business is the Tier 1 supply of geared driveline products, namely power transfer units and rear drive units for AWD vehicles, as well as final drive units for high-performance rear wheel drive vehicles. The company is also working on the future supply of transmission and axle products for hybrid and electric vehicle drivetrains.
GKN said that with operations in the US and Europe, Getrag Driveline Products has a product, manufacturing and customer footprint that is complementary to GKN's own geared product business, which is predominantly based in Asia.
Getrag Driveline Products will be integrated into GKN Driveline, being an appropriate fit with GKN's existing product range and technology.
As part of the overall transaction, GKN is also acquiring an exclusive licence to Getrag's electric drivetrain technology for use in electric and certain hybrid vehicles. The licence is primarily for Europe and the Americas.
Commenting on the acquisition, CEO of GKN Driveline Nigel Stein said: "This acquisition is a significant step forward for Driveline, accelerating our strategy for growth in AWD systems and hybrid/electric drivetrains. Production of AWD vehicles is forecast to grow at above market rates reflecting increasing demand globally for crossover vehicles and compact SUVs.
“Combining our engineering and technology resources will strengthen our ability to provide customers with leading-edge technology, fuel-efficient solutions and to develop next generation drivelines."
The acquisition cost comprises £283 million in cash together with further deferred consideration of up to £12 million, depending on Getrag Driveline Products' success in achieving future business awards.
Headquartered in Redditch, GKN is a global engineering business serving the automotive, aerospace and land systems markets. It has operations in more than 30 countries, around 40,000 employees in subsidiaries and joint ventures and had sales of £5.4 billion in the year ending 31 December 2010.
