[15
SEP 98] ALVIS VEHICLES PRESS RELEASE
Alvis And GKN To Create Enlarged Armoured Vehicle Business In Transaction Announced Today
- Alvis and GKN to form a leading European armoured vehicles
business
- GKN to inject its armoured vehicle activities into Alvis in
exchange for a 29.9% shareholding in the new enlarged business
- GKN will be the largest shareholder in Alvis and will be
represented on the Alvis Board
- GKN Defence is a major supplier of tracked and wheeled
vehicles to the British Army. Its main products include: Warrior, Piranha, Simba, Tactica
and Aquatrack. GKN Defence is a partner in Eurokonsortium which has been preliminarily
selected for the tri-national MRAV programme
- The Directors expect the transaction to bring substantial
benefits:
- a more comprehensive product portfolio for sale into the international market
- strengthened Alvis operational management through combination with GKN Defence’s
experienced team
- a stronger position in relation to major future UK programmes, such as MRAV and TRACER,
either as a prime contractor or major contributor, potentially leading to a significantly
enhanced market position for Alvis in the UK
Alvis and GKN expect annual cost savings in excess of £5
million resulting from the merger
The transaction is subject to Alvis shareholder approval and
regulatory approval
Mr N M Prest, Alvis’s Chairman, said: "This transaction will position Alvis as one of the
leading light and medium armoured vehicle companies in the world. Participation in the
MRAV programme on top of our existing order book will enhance long term stability and
growth prospects. The combination of Alvis and GKN Defence will bring substantial benefits
to shareholders, to customers and, through enhanced export prospects, for the UK."
Mr DJ Wright, Executive Director of GKN’s defence
activities, said: "This is the most
important step in the consolidation of the European armoured vehicle industry – a
process which we and Alvis see as important for our future competitiveness within the
industry. The enlarged Alvis will play a leadership role from a position of strength in a
way that will be highly positive for the business and all our shareholders."
Historically, the Alvis armoured vehicle business has been
profitable, but it is a relatively small niche producer and the profit stream is
substantially dependant on demand for Scorpion and Stormer vehicles, which fluctuates
considerably. Similarly, whilst the GKN Defence business has performed very strongly in
recent years, deliveries of Warrior to the UK and overseas have now been completed, and
the demand will be lower in the near future. Consequently, the business of both Alvis in
Coventry and GKN Defence in Telford have under-utilised resources. The proposed
transaction will allow this problem to be addressed. Some initial views have been formed
on rationalisation of the businesses. These views are subject to consultation with the
workforce at Alvis and GKN Defence.
Basically the views are that the projected workload for the two businesses can be
planned onto one site and that the existing two sites cannot sensibly be sustained. The
practicality of this rationalisation will be investigated. Since the size envelope of GKN
Defence’s vehicles is larger than that of Alvis’s it is likely to be more
economic and practical to rationalise onto GKN Defence’s site. If these views are
confirmed the Alvis site at Coventry would close thus unfortunately putting all jobs at
risk. However, in these circumstances there may be an opportunity for the skills of some
of the Coventry workforce to be relocated to the site at Telford.
MORE INFORMATION: Nigel Turner
01203 535455 |
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