GKN To Buy Fokker For EUR€706 Million

British engineering company GKN has agreed to acquire Netherlands-based Fokker Technologies for EUR€706 million (USD$781 million), boosting its standing as an aerospace supplier.

GKN, whose historic roots are in auto-parts supply but which has moved into aerospace in the last two decades, said the deal would extend its global reach in the aerospace sector, building on its acquisition of Volvo's aerospace unit in 2012.

Chief executive Nigel Stein said Fokker's activities were complementary and GKN was attracted to its presence in China, Turkey, India and Mexico.

"In our auto business, we're out there all around the world. For some time now we've had the goal of taking aerospace to broader parts of the world and this is a useful step forward in that goal," he told reporters.

GKN said Fokker's position on two big projects, the Airbus A350 and the Lockheed Martin F-35 military jet, were a good fit with its own positions.

The acquisition would be earnings accretive in its first full-year, GKN said, and was expected to deliver cost savings of 3 percent of sales by 2018.

Stein said he was confident of delivering the targeted savings, citing GKN's track record in doing so.

In the United States, Fokker was last year fined for illegally shipping aircraft parts to Iran and other countries, a situation with which GKN said it was comfortable having undertaken due diligence.

"We feel comfortable that there's no material ongoing liability or risk for GKN as part of this," finance director Adam Walker said.