2nd Feb 2005 07:00
2 February 2005GKN Completes Acquisition of the Remaining 51% Shareholding in Velcon from DESCGKN plc announces that on 1 February it completed the acquisition of the 51%equity interest that it does not already own in Velcon S.A. de C.V. ("Velcon"),its Mexican constant velocity joint ("CVJ") joint venture.The consideration for the acquisition from Desc, S.A. de C.V ("Desc") of theshares in Velcon and expansion land adjacent to the current facility was $83million (‚£44 million), and will be satisfied in cash out of existing resources.51% of Velcon's net assets were 507 Peso million (‚£23 million) and profits,before taxation provisions, attributable to the 51% were 105 Peso million (‚£5million) based on the most recent audited accounts for the twelve months ended31 December 2003. The balance sheet at completion will contain net cash of atleast $12 million (‚£6 million). 51% of any surplus cash over and above thisamount will be paid to Desc. The acquisition is expected to be earningsaccretive.Arthur Connelly, CEO of GKN Driveline Driveshafts, said: "This is an importantstep in the realisation of the CVJ manufacturing strategy announced in Marchlast year. Taking full control of Velcon will build on our successful jointventure relationship with DESC and enable us to fully integrate Mexico into ourglobal supply chain."Further enquiries: GKN Corporate Communications+ 44 (0)20 7463 2354ENDSRelated Shares:
GKN PLC