FARNBOROUGH, England, July 17 (Reuters) - GKN is on the hunt for acquisitions in the aerospace components industry, its chief executive said, as the British engineering company sees the sector as ripe for consolidation.
“We have our eye on things we’d like to do, and we keep watching those situations,” Chief Executive Nigel Stein told Reuters in an interview on Wednesday.
Declining to comment on GKN’s reported interest in buying a wing manufacturing facility being sold by U.S. company Spirit Aerosystems in Tulsa, Oklahoma, Stein said that these sorts of deals were often “long-play”.
The company’s 633 million pound ($1.08 billion) acquisition of Volvo AB’s aerospace division was four years in the making, he noted.
When questioned on the Tulsa site in the past, Stein has said it would be logical to assume that GKN would be interested in it.
Compared to the car parts sector, Stein said that the aerospace components industry had a more regional complexion but this was set to change.
“I think you’re going to see the Western industries consolidating, as we see new entrants in the East, Brazil, Mexico, and India, the whole of Asia,” he said.
A growing focus on cost from customers, including planemakers Boeing and Airbus, as well as the increasing complexity of their projects could also help spur consolidation, Stein said.
Stein refused to be drawn on the budget for any GKN acquisition but he pointed to the Volvo purchase, which was GKN’s biggest ever, and was secured with a 140-million-pound share placement.
“For the right deal, the scope is there if you make a good case to shareholders to do large things,” he said.
$1 = 0.5846 British Pounds Reporting by Sarah Young; editing by Jason Neely