GKN acquires Airbus Filton

GKN has also signed contracts for significant work packages to design and produce large scale composite structures for the wing of the new A350 XWB (Extra Wide Body) long haul airliner In 2009, the first full year under GKN’s ownership, it is expected that the Filton operation will have revenues of approximately £375 million and will be both earnings accretive and cash generative. The combination of the acquisition of the Filton wing component manufacturing and assemblies operation and the A350 work packages delivers considerable benefits. - The Group order book for large civil aircraft structures increases from $4.5 billion to approximately $10 billion - A strategic supplier relationship is established with Airbus. - GKN achieves a more balanced mix of business across the civil and defence sectors and between Europe and North America. The Filton operation, which was part of a larger cost centre under Airbus ownership, is being acquired for a total consideration of £136 million. An initial payment of £100 million will be made on completion with the balance of £36 million payable in annual instalments over the years 2010-2015. The consideration is being met from existing resources. GKN will also assume future pension obligations in respect of transferring employees at completion. The value of the gross assets of the business being acquired was £89 million as at April 30, 2008. GKN intends to invest £125 million over five years to further develop the Filton business as global centre of excellence in composite wing structures as part of its participation on the A350 XWB. This new generation aircraft will feature an all-composite wing using the latest composite material and automated manufacturing technologies.