GKN may swoop for aircraft business

The swoop by GKN, which employs 40,000 people and has operations across the UK, would represent one of the biggest acquisitions by a British manufacturing firm since the banking crisis.

GKN is the frontrunner for the Volvo arm after Germany’s leading engine maker, MTU Aero Engines, dropped out of the auction process started by Volvo in November.

The deal would represent a major boost to GKN’s aerospace division, which last year recorded sales of £1.5bn and is a supplier of aircraft components to both Airbus and Boeing. Its biggest division is automotive, which makes parts for many of the world’s big car-makers.

The Volvo business up for grabs makes the RM12 engine for Saab’s Gripen fighter jets, used by the Swedish military, as well as supplying engine components to the three main engine manufacturers, including Rolls-Royce. The deal could signal the start of a spending spree in the industrial sector.