AgustaWestland Helicopter Joint Venture Finalised
AgustaWestland, July 26, 2000 - Finmeccanica S.p.A. of Italy and GKN plc of the UK today announce that subject to regulatory approval, they have finalised their agreement to merge their helicopter businesses. The new company will be known as Agusta Westland. Finmeccanica and GKN will each own 50% of the joint venture post completion.
In a joint statement Finmeccanica and GKN said: "This is a world-class alliance of equals united by the same strategic vision â€“ to deliver outstanding products and services to our customers and to maximise value for our shareholders. With combined 1999 revenues of more than $2.1 billion and a civil and defence order book of $8 billion, it will be a powerful force in the world helicopter industry. It is a leader in a number of the world's most important helicopter programmes and has an impressive pipeline of new products and technologies. We are combining two of the world's most respected helicopter brands and management teams to create a business which can look forward to major growth opportunities. Agusta Westland faces and exciting future with confidence."
In consideration for its 50% interest in Agusta Westland, GKN will contribute its helicopter prime contractor, GKN Westland Helicopters, including its 50% share in the existing EHIndustries joint venture with Agusta, GKN's aerospace transmissions business and GKN's 50% interest in Aviation Training International Limited, the joint venture with Boeing of the US to provide training support for the British Army's Apache. The GKN Westland businesses generated consolidated operating profits of £. 80.0 million for the year ended 31 December 1999 and had proforma net liabilities of £. 71.7 million at 1 January 2000. The transaction is expected to be broadly earnings neutral to GKN in the short term and positive thereafter.
In consideration for its 50% interest in Agusta Westland, Finmeccanica will contribute its Agusta helicopter business, including its transmissions and structures businesses and its 50% share in EHIndustries. It will also contribute Agusta's interests in the NH90 joint venture, NH Industries, whose other partners are Eurocopter and Fokker as well as Agusta's share of the joint venture with Bell Helicopter Textron of the US, which includes the new medium twin, the AB139 and the BA609 tilt rotor aircraft development. For the year ended 31 December 1999 the Agusta businesses generated operating profits of Lira 151 billion (£. 48.1 million) and had proforma net assets at 1 January 2000 of Lira 191 billion (£. 61.5 million) excluding asset step up and goodwill. The transaction is expected to be slightly earnings accretive for Finmeccanica.
The opening balance sheet for the joint venture will be as at 1 January 2000 and economic benefit will be shared equally thereafter. Kevin Smith, and Executive Director of GKN and Managing Director of its Aerospace businesses will, in addition to his existing responsibilities, become the first Chairman of the new company. Amedeo Caporaletti, currently President and Chief Executive of Agusta, will be its first Chief Executive. Richard Case, currently Chief Executive o f GKN Westland Helicopters, will be the first Managing Director. Subject to approval of the EU competition authorities Finmeccanica and GKN expect that the new company will become fully operational in the Autumn.
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