| LONDON/NEW YORK July 26
LONDON/NEW YORK July 26 British aerospace and
car parts maker GKN is interested in buying a Spirit
Aerosystems wing factory in Tulsa, Oklahoma, and the
U.S. company has hired Morgan Stanley to find a buyer,
according to three people familiar with the matter.
The Tulsa factory employs about 3,000 people and produces
wing structures and components for Boeing 737NG, 747, 777
and 787 jetliners, Spirit said.
Spirit also makes wing components in Kinston, North
Carolina, for the Airbus A350, and has a factory in Prestwick,
Scotland, that supplies many Airbus models, including the A380
superjumbo. A plant in Subang, Malaysia, makes composite wing
The broader Spirit wing division is not part of the possible
sale, the sources said.
Spirit started reviewing four units, including divisions in
Kansas and Oklahoma, after former Lockheed Martin executive
Larry Lawson became chief executive in March, following losses
from cost overruns in 2012. In May, Lawson hired Heidi Wood,
longtime managing director of aerospace research at Morgan
Stanley, as vice president of strategy at Spirit.
GKN, Spirit, Morgan Stanley and Boeing declined to comment.
A spokeswoman for Airbus said such a transaction, if
consummated, would not affect the European planemaker.
GKN designs and makes wings at its site in Filton, southwest
England, and supplies aero structures, and fuel and flotation
systems. Last year it bought Volvo's Aero aerospace business.
Aerospace provided about 20 percent of GKN's 6.9 billion
pounds ($10.6 billion) of revenue in 2012.
Britain's Daily Mail newspaper said on Thursday that
speculation about a bid for the whole company had intensified
this week, citing dealers saying GKN could launch a cash and
shares offer of $5 billion. Bank of America Merrill Lynch is
advising GKN, the paper said.
The three sources with knowledge of the matter could not
confirm if the whole of Spirit was part of the talks. They
declined to be named because they were not authorized to speak
Jefferies analyst Sandy Morris said sale of some or all of
Spirit's wing systems division was possible. BofA Merrill Lynch
analysts say the division is underperforming, with about $1.3
billion in revenue in 2013 and margins of 4.5 percent. About
$1.3 billion of Spirit's 2013 estimated $6 billion in sales are
from wing systems, the analysts said.
On Thursday, Spirit Aerosystems said it was laying off about
360 workers in Kansas and Oklahoma. The company also makes
airplane body sections for the best-selling Boeing 737
and Airbus A320 jets, as well as components for other
aircraft makers, including Bombardier, Gulfstream
Boeing makes up about 80 percent of Spirit's business, a
source familiar with the matter said.
On Friday, Spirit's share were up about 1 percent at $25.70
in New York. GKN shares fell about 0.8 percent to 324.10 pence
On Thursday, Spirit's shares closed 5.7 percent higher at
$25.45 while GKN shares fell 4.2 percent.