U.K.-based manufacturer GKN PLC confirmed last Friday that it is in talks with Dana Inc. over the possible merger of its Driveline division with the Ohio-based company, and that it believes any deal would provide greater value to shareholders than a demerger of the unit. 

The British engineering group, which is fighting off a US$ 10.2 billion hostile bid from turnaround specialist Melrose Industries PLC, said it has received a number of approaches for its GKN Aerospace and GKN Driveline units since the announcement made last January that it planned a spin-off between both divisions.

It said Friday that it would still consider this option alongside its talks with Dana, and that any deal would be financed via equity. GKN cautioned that there's no certainty the talks will lead to any deal and reiterated that shareholders should take no action over the Melrose offer.

GKN’s footprint in Mexico has grown continuously since it started production of CVJ Systems in Celaya, Guanajuato in 1979. GKN Driveline has a second site in Villagran, Guanajuato, which opened in 2006 and both sites have been expanded in recent years. 

Meanwhile, GKN Aerospace currently has four sites in Mexico manufacturing airframe and engine structures. Two of those facilities are located in Mexicali, one in Chihuahua and another one in San Luis Potosi. GKN currently employs over 2,000 people across these six sites.

Dana Holding Corporation operates manufacturing sites in Chihuahua, Monterrey, Queretaro, Tlaxcala, Toluca and Mexico City, dedicated to the production of axles, driveshafts, suspension and transmission parts, as well as electronic components for both light and commercial vehicles.


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