Airbus CEO Hasn't Decided Whether to Oppose Hostile GKN Takeover
(Bloomberg) -- Airbus SE Chief Executive Officer Tom Enders said he hasn’t decided whether to oppose the hostile takeover of GKN Plc, while repeating concerns that led the planemaker to warn it may stop doing business with its supplier if it fell into the hands of Melrose Industries Plc.
“We did not take really a hard-nose decision yet, but we have concerns about it,” Enders told shareholders at the planemaker’s annual meeting Wednesday in Amsterdam. “It’s clear our aviation business is a long-term business and private equity is relatively volatile, short term.”
Airbus, part of a global duopoly in jetliner production with rival Boeing Co., is a crucially important customer for GKN, representing 20 percent of its aerospace sales. In March, the Toulouse, France-based manufacturer took the unusual step of weighing in on the battle for control of GKN, warning it had concerns over whether Melrose, a U.K. turnaround firm, would continue to support necessary research and development investment as it seeks short-term fixes to the business.
“It would be practically impossible for us to give any new work to GKN under such an ownership model when we don’t know who will be the long-term investor,” Tom Williams, chief operating officer of Airbus’s commercial aircraft division, said at the time.
In late March, Melrose’s 8.1 billion-pound ($10 billion) offer was accepted by shareholders representing 52 percent of GKN’s voting rights, besting the Redditch, England-based target’s own plan to sell off its automotive driveline business and focus on aerospace. Since then, the U.K. government has said it will look into whether the transaction poses a threat to national security. Melrose, based in Birmingham, England, has pledged not to sell off the aviation business for at least five years.
“We certainly prefer industrial investors who commit to the business on a longer term scale than on a short term scale,” Enders said Wednesday. “But as I said, we have not blocked anything, we just raised concerns and I’m sure those will be taken into account.”
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