Alvis set for GKN merger

GKN, THE AUTOMOTIVE, defence and industrial services group, is close to merging its Warrior armoured vehicles division with Alvis in a deal that will kickstart the long-awaited rationalisation of the UK's fighting vehicles industry.

An announcement about the pounds 300m alliance is expected within the next fortnight and could be the precursor to a wider restructuring of the European defence industry.

Sources close to the discussions said that GKN and Alvis were still negotiating each company's share in the merged business.

But they discounted suggestions that the new grouping would be floated separately on the London stock market.

GKN is best known for its Warrior and Piranha armoured vehicles, which are manufactured by a 550-strong workforce at Telford.

Alvis makes the Scorpion and Stormer tracked vehicles at its Coventry plant, which employs 350.

It almost doubled in size last year with its pounds 84m takeover of Swedish armoured vehicle manufacturer Hagglunds.

An alliance between Alvis and GKN would bring Alvis into the pounds 3bn programme to build a "battlefield taxi", which GKN won last year as part of the Eurokonsortium.

GKN, Giat of France and the ARGE grouping of Germany each have a one- third share in the consortium, which has been selected to build 6,000 to 7,000 multi-role armoured vehicles for the British, French and German armies.

Alvis was a member of the losing consortium led by Vickers, the manufacturer of the Challenger 2 tank.

At the time the contest was settled it was predicted that it would lead to a consolidation of fighting vehicle manufacturers in Europe.

The alliance between GKN and Alvis threatens to leave Vickers further out in the cold although there is still a possibility that some three- way tie-up could be constructed.

Vickers will announce about 400 jobs losses in its tanks division on Thursday. The company employs 1,400 at two factories in Newcastle and Leeds.

Production of the Challenger 2 for the British Army will end early next century but Vickers is hoping to win a pounds 1bn contract from Greece for up to 300 tanks.

It is also chasing a smaller order in Qatar.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test