GKN's $62m buy lifts share in US aviation

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GKN's declared strategy of expanding its aerospace business took a further step forward yesterday when its GKN Westland Aerospace unit paid $62m (pounds 36.8m) for Dow UT, which makes lightweight high-strength airframe parts and aero engine components for US aircraft makers including Boeing, Lockheed Martin, General Electric and Pratt & Whitney.

Dow-UT was established in 1989 as a joint venture between Dow Chemicals and United Technologies.

It makes conventional laminated items and is a market leader in the design and use of high technology resin transfer moulding techniques to produce complex lightweight components.

More than 50 per cent of its production goes into the US defence industry.

The acquisition will strengthen GKN Westland's presence in the US aviation market and give it a foothold in the F22 project, which will develop and build the next generation US combat fighter, GKN said.

Dow-UT made a loss of $7.1m on sales of $80m last year as a result of one-off costs and charges, but the business has assets of $72.6bn and is being acquired debt-free.

It is expected to have a positive impact on GKN Westland's earnings in 1999, increasing its turnover by up to 20 per cent and creating significant cost savings.