Was the GKN Takeover Battle Worth It?

Morningstar columnist Rodney Hobson looks at the engineering company GKN 18 months after the controversial takeover by turnaround specialist Melrose Industries

Rodney Hobson 22 November, 2019 | 9:28AM

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Few takeovers in recent years have been as controversial or as bitterly fought as the £8 billion acquisition of engineering company GKN by turnaround specialist Melrose Industries (MRO). Politicians huffed and puffed about national security and asset stripping; investors contested whether GKN needed turning around; customers threatened to take away their business; a spirited defence by GKN’s board limited acceptances to 52% of shares.

Melrose has now had 18 months of ownership of the aerospace and car parts manufacturer. It says it continues to transform the GKN businesses although “some macro conditions could be more helpful”. However, figures for the four months to October 31 were merely in line with expectations. There is still some way to go before the takeover can be declared a riproaring success.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Johnson Matthey PLC2,283.00 GBX-1.17
Kingfisher PLC295.90 GBX1.75
Melrose Industries PLC110.55 GBX1.52

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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