GKN 'set to sell remaining stake in helicopter firm'

Engineering group GKN today signalled the end of British ownership in the helicopter industry by saying it may sell its stake in AgustaWestland.

Redditch-based GKN said it was in talks about disposing of its 50% share in the Yeovil-based business to Finmeccanica of Italy, which owns the other 50% of Agusta.

A sale of the stake, which is tipped to fetch between £900m (€1.3bn) and £1bn (€1.5bn), would leave the industry dominated by North American and continental European manufacturers such as Sikorsky, Boeing, Bell and Eurocopter, owned by European aerospace group EADS.

The helicopter maker was at the centre of the so-called Westland Affair in the mid-1980s, which led to the resignation from the Thatcher government of former British Defence Secretary Michael Heseltine.

Westland had encountered serious financial difficulties and a rescue package demanded assurances of MoD contracts.

Mrs Thatcher and Mr Heseltine disagreed over a solution to the crisis, leading the latter to step down in early 1986.

GKN is believed to be planning the sale to focus on its automotive business and its other aerospace activities.

It said today that the disposal would be “part of the further development of the group”, but did not give more details.

“A further announcement will be made when appropriate and until that time, it would be inappropriate to comment further,” the company said in a statement accompanying its annual meeting.

AgustaWestland produces commercial and military helicopters including the light single-engine A119 Koala, the three-engine multi-role EH101, the Super Lynx 300 and the Apache AH MK1.

An aerospace analyst who declined to be identified said the helicopter industry had too many players and was in need of consolidation.

GKN’s ownership of a 50% stake in Agusta was not the most efficient use of its resources, he said.