GKN snaps up a bargain by buying Volvo's aero-engine arm for lower than expected £633m

GKN has sealed a deal to buy the aero-engine arm of the Swedish truck-maker Volvo for £633m, less than the market was expecting them to pay for a takeover that had already been widely welcomed.

Shares in the British engineer jumped 13 per cent to 211p, even though it announced a £140m share placing to help pay for the purchase.

GKN's chief executive Nigel Stein said it was an attractive acquisition "creating a market leader in aero-engine comp-onents". The payment includes £513m for the business, a £50m pension settlement and £70m refinancing.