Announcements

 GKN plc today announces that it has signed an agreement with the shareholders of Stromag Holding GmbH (Stromag), to acquire the entire issued share capital of the business. Stromag is a privately held company whose shareholders include Equita GmbH & Co. Holding KGaA and a large number of other organisations and individuals, including management.

http://www.stromag.com/

Stromag, which will be integrated into GKN Land Systems division, is a market leading engineer of industrial power management components with a strong technology base and focus on providing tailored solutions for its customers. Its core products include hydraulic clutches, electro-magnetic brakes and flexible couplings serving end-markets including agricultural equipment, construction and mining machinery, renewable energy and the metal processing industry with a well recognised and valued brand. The business is headquartered in Unna, Germany and has operations in Germany, France, USA, Brazil, India and China.

The acquisition cost comprises a cash consideration of €164 million (£146 million) for the equity and repayment of debt of €31 million (£28 million). Closing of the transaction is expected during September, subject to customary conditions and necessary regulatory approvals. The acquisition will be funded from the Group’s existing resources.

For the last audited year ended 31 December 2010, Stromag reported sales of €111 million (£99 million), EBITDA of €19 million (£17 million), profit before taxation of €10 million (£9 million) and gross assets were €103 million (£92 million). In 2011, sales are expected to be around €140 million (£125 million) and the acquisition price equates to a multiple of 7.5 to 8.0 times expected 2011 EBITDA. The impact of the transaction on GKN is expected to be earnings enhancing on a management basis⁽¹⁾ from the first full year of ownership.

Andy Reynolds Smith, Executive Director, GKN plc, commented: "The acquisition of Stromag is an important step in the implementation of the GKN Land Systems’ strategy to build a global leader in Industrial Power Management, extending our capability in electro mechanical components. In combination with our existing business, it will provide a strong platform to accelerate growth in existing markets, together with access to a number of attractive new industrial segments including renewable energy.”

Notes:
Exchange rate used £1: €1.12

⁽¹⁾ Management earnings are Group earnings adjusted to exclude the earnings impact of restructuring and impairment charges, gains and losses on changes in Group structure, amortisation of non-operating intangible assets arising on business combinations, change in value of derivative and other financial instruments, other net financing charges and material pension scheme curtailments.

Further Enquiries
Guy Stainer
Director, Investor Relations and External Communications
GKN plc
T: +44 (0)207 463 2382
M: +44 (0)7739 778 187
E: guy.stainer@gkn.com

Andrew Lorenz
Financial Dynamics
T: +44 (0)20 7269 7113
M: +44 (0)7775 641 807

Stromag Holding GmbH website: http://www.stromag.com/

With 18 exhibition halls, over 320,000 m² exhibition floor space and more than 2,200 exhibitors, Agritechnica is the world’s largest exhibition for agricultural machinery and equipment.

Preview Days 13-14 November 2011

Show days 15- 19 November 2011

 GKN Land Systems will be exhibiting at SIMA 2011,  the only trade show that meets all the needs of a farming operation: equipment, livestock breeding and renewable energy

• 1,323 exhibitors and 1,446 brands in which 258 new exhibitors in 2009!
• 208,550 trade visits and 104 countries represented
• 95% of visitors to SIMA 2009 plan to come back in 2011!

Did you know?

• SIMA welcomes nearly 300 international delegations.
• The international press stand features 49 trade magazines from 12 countries.
• The 500 journalists attending the show represent 50 countries.

Visit us at hall 5b C stand 163

Show days 20-24 February, Paris Nord Villepinte

GKN plc, the global engineering business that serves the automotive, industrial, off-highway and aerospace markets, today announces the creation of a new division with a strategy for growth and market expansion and the goal of creating a fourth global leader.

The new division, GKN Land Systems, has current annualised sales of approximately £700 million. GKN aims to increase the size of this business over the next five years to sales of about £1.5 billion.

Land Systems division brings together the existing operations of GKN OffHighway, GKN AutoStructures and GKN Industrial and Distribution Services.

Sir Kevin Smith, GKN’s Chief Executive, said: “This is a milestone in the growth of GKN. We have a proven track record in developing market leading businesses. We aim to do this again with GKN Land Systems and develop it into another global leader alongside Driveline, Powder Metallurgy and Aerospace, operating at the forefront of their industries”.

Andy Reynolds Smith, Chief Executive, GKN Land Systems, said: “By building on GKN Land Systems’ existing strengths in the off-highway market and by applying the leading-edge technologies we have developed across the Group, we intend to capitalise on the opportunities being presented in both our existing markets and new, high growth sectors”.

GKN Land Systems will focus on two key technology areas: Power Management and High Performance Structures, supported by an expanded Aftermarket and Service arm. GKN already has a number of leadership positions based on these capabilities, notably in components and systems for agricultural, construction and mining vehicles.

Next generation technology developed by GKN is also opening up growth opportunities in defence, high speed rail and potentially in wind power. Andy Reynolds Smith said: “Customers in all these industries are increasingly demanding more sophisticated solutions from global suppliers. GKN has the technological capability and the worldwide network to meet those requirements.

The businesses that form Land Systems will provide a powerful platform for growth and value creation across markets.”

Cautionary Statement

This announcement contains forward looking statements which are made in good faith based on the information available to the time of its approval. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward looking statement which could cause actual results to differ materially from those currently anticipated.

Notes to Editors

GKN plc is a global engineering business serving mainly the automotive, aerospace, industrial and off-highway markets. It has operations in more than 30 countries, around 38,500 employees in subsidiaries and joint ventures and had sales of £4.5 billion and trading profit of £156 million in the year ended 31 December 2009. GKN plc is listed on the London Stock Exchange (LSE: GKN).

Further Enquiries

Guy Stainer
Director, Investor Relations and External Communications
GKN plc
T: +44 (0)207 463 2382
M: +44 (0)7739 778 187
E: guy.stainer@gkn.com

With the First to Market strategy and the support of an external OE data supplier, GKN Aftermarkets & Services is realising “the optimum quality of its data for replacement parts for the Passenger Car Independent Aftermarket, also for parts which are not supplied by GKN to series manufacturing. With this, it has created considerable customer benefits with an edge over the competition.

Efficient use of resources

“Today it isn’t enough to offer a replacement part in the Independent Aftermarket, 4-6 years after the series production of an automobile,” Manfred Neumann, Director Product Management GKN AMS. “We needed a tool which allowed us to use the existing resources more efficiently which, at the same time, offers a long term benefit for our customers. We had to ensure that our product managers were, once again, able to focus on their core duties – product and programme development.”

The continual updating of catalogue data cost GKN AMS vital time in the timely placement of new products on the market. The evaluation of a model series in all versions took about 20 hours until the product launch.

Today, with the targeted evaluation of the OE data, twice as many models are evaluated and forwarded to the product divisions which often halves the time it takes to the market launch of new products. With intelligent vehicle links to the relevant replacement parts, it is also possible to reduce the number of physical new products which, in turn, effectively cuts storage costs.

GKN Land Systems participates  AG CONNECT EXPO

• When: January 13-15 , 2010
• Where: Orange County Convention Center in Orlando, Florida, USA.
• First edition of the only world-class international forum for agriculture industry professionals in the US.
• It is expected to have 700 national and international exhibitors using more than 250.000 net square feet of exhibit space.
• It will feature the latest innovations and technologies in agribusiness products and services, including equipment as well as integrated technology.
• Some 20.000 industry professionals from around the world are expected to attend AG CONNECT Expo 2010.

GKN, the world’s leading manufacturer of automotive driveline components, has been nominated as one of the 2009 Top Ten International IAM brands for automotive components in China.