July 26, 2000
GKN, Finmeccanica agree helicopters merger
LONDON, UK ( Reuters ) -
British engineering group GKN Plc said on Wednesday it and Italy's Finmeccanica SpA had agreed to merge their helicopter businesses and create a joint venture, AgustaWestland.
Between them the companies had revenues of more than $2.1 billion in 1999 and a civil and defence order book of $8 billion.
This would make them a ``powerful force in the world helicopter industry'', GKN and Finmeccanica SpA said in a joint statement.
``This is a world class alliance of equals united by the same strategic vision to deliver outstanding products and services to our customers and to maximise value for
shareholders,'' they said.
Each company will hold 50 percent in the venture.
GKN will contribute GKN Westland Helicopters while Finmeccanica will provide its Agusta helicopter business. For both this will include a 50 percent share in their existing EH Industries joint venture.
GKN's contribution will also include its aerospace transmissions business and 50 percent interest in Aviation Training International Ltd, a joint venture with Boeing of the United States to provide training support for the British army's Apache helicopter.
Finmeccanica's share will include Agusta's transmissions and structures business, its interests in the NH90 joint venture, and its share in a joint venture with U.S. company Textron Bell Helicopters.
While the GKN Westland business generated a pretax profit of 79.9 million pounds in 1999, Agusta made a pretax profit of around 46.9 million pounds.
Kevin Smith, an executive director of GKN Westland, will become chairman of the new company, and Agusta Chief Executive Amadeo Caporaletti will take that role in the merged entity.
GKN Westland Chief Executive Richard Case will be AgustaWestland's managing director.
Subject to regulatory approval, on which the deal rests, the new company is expected to become operational in the autumn.