Andrew Chuter/LONDON

Control of Normalair-Garrett (NGL) in the UK has switched from GKN to AlliedSignal in a move which sees the US company acquire an additional 4% share in their joint venture operation. AlliedSignal has also purchased New York-based Hermetic Aircraft from GKN.

The £12 million ($20 million) NGL deal sets the stage for AlliedSignal to acquire the remaining 48% held by GKN after 31 December, 1999. AlliedSignal, which has held a 48%share in Normalair-Garrett since 1967, will pay an additional £66 million or so if it exercises the option to buy.

NGL sales last year amounted to £94 million, primarily building life support and aerospace environmental control systems (ECS) at its base at Yeovil in the UK and at two small Australian operations. Profits amounted to £10.4 million in 1997. GKN's shareholding for the next 18 months will allow it to take advantage of continuing profit growth, largely as a result of work secured on the Royal Air Force Nimrod 2000 maritime surveillance aircraft project.

NGL becomes part of AlliedSignal's fast growing Aerospace Equipment Systems business and will be used to further the US company's aspirations to play a larger role in the European environmental control systems industry. Tig Krekel, Aerospace Equipment Systems president and chief executive, says NGL will become "-the focal point for the creation of an ECS centre of excellence with strong European roots. This move illustrates our dedication to the region."

Krekel says that Aerospace Equipment Systems is the fastest growing sector of AlliedSignal, with "double digit growth" expected this year continuing through to mid-2000". Last year the business, which involves 12,000 people in manufacturing enterprises ranging from engine controls and aircraft lighting to wheels and brakes, accumulated sales of $2.3 billion. This year Krekel is expecting sales of $3 billion as internal growth and the full effects of last year's acquisition of Grimes Aerospace kick in. The Aerospace Equipment Systems boss admits that acquisitions will continue to play a part in the company's expansion plans.

David Wright, managing director of GKN Aerospace and Special Vehicles, says that NGL does not fit the company's strategy to build its principal businesses into global market leaders. He says: "NGL, because of its focus on the UK, was constrained in its ability to take advantage of the consolidation and globalisation of the aerospace industry, whereas AlliedSignal is one of the leading companies in the world for ECS."

While NGL transitions from GKN to AlliedSignal control - subject to various approvals - the $13 million Hermetic deal will see the repair and overhaul facility become part of AlliedSignal's Aerospace Marketing Sales & Service business.

Source: Flight International