Melrose's plunder of GKN is a severe blow to the nation's economic security, says ALEX BRUMMER
Melrose's plunder of GKN is a severe blow to the nation's economic security, says ALEX BRUMMER
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Here is another idea for Rachel Reeves. If the Government really wants the UK to be a scientific and manufacturing champion, it must stop intellectual property, patents and scientists escaping overseas. Six years ago, this paper ran a campaign against the sale of GKN, one of Britain’s oldest engineering groups, to the financially-driven, quoted buy-out group Melrose.
We came within a whisker of winning the hearts and minds of shareholders. Only a last-minute vote by asset managers at Legal & General allowed the plunderers at Melrose to plough ahead. The private equity-style model pioneered by former bosses Christopher Miller and Simon Peckham allowed them to secure tens of millions in payouts before leaving the scene.
Talent drain: The London Stock Exchange has been denuded of engineering and aerospace stocks by opportunist takeovers. The difference between the Melrose purchase of GKN and its previous deals is that, instead of immediately carving up the assets and selling them on to largely American buyers, they were forced by economic circumstances, the pandemic and the Ukraine war to keep them on the London stock market Now the inevitable has happened.
US car components rival American Axle has taken advantage of unloved GKN offshoot Dowlais, and moved in for the kill with a low-ball £1.2billion offer. Should we care?. It is another blow to the prestige of the London Stock Exchange, which has been denuded of engineering and aerospace stocks by opportunist takeovers.
