Melrose Industries PLC LON:MRO) is already looking to break up British engineering giant GKN, according to reports.
A report by Sky News claims executives at Melrose are trying to stir up some interest in GKN’s Powder Metallurgy division in preparation for an auction as soon as this autumn.
Powder Met, which makes 13mln high-performance components for cars and other industrial applications every day, is one of GKN’s most valuable units, reportedly worth between £1.5-2bn.
READ: Melrose to announce plans for GKN as it moves closer to full ownership
Citing sources close to the industrial turnaround group, Sky said the business is expected to be hived off in the near term, although a firm timetable has yet to be formally agreed.
Plans to sell the division are unlikely to spark renewed controversy in Melrose’s ownership of GKN, which it acquired earlier this year after a tense bidding war.
The timing of the sale might, though. As part of the takeover, Melrose agreed to give the UK government “early visibility” of potential bidders for any GKN operations with national security implications.
GKN is seen as having an important role to play because of its defence contracts and importance to the supply chain, despite only employing around one-tenth of its 60,000-strong workforce in the UK.
Bankers also expect Melrose to sell other GKN businesses such as Off-Highway Powertrains and a unit which manufactures wheels, although a spokesman, speaking to Sky, said there were no plans for such disposals at this time.
A spokesman for Melrose declined to comment on the plans for Powder Met, added Sky.
Melrose shares are broadly flat at 235.7p.