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Rheinmetall expands; GKN set to do so

DUSSELDORF, Germany, Sept. 5 (UPI) -- German and British companies are expanding their business portfolios in the naval and aerospace sectors through major acquisitions.

In Germany, Dusseldorf's Rheinmetall Defense announced that it is set to acquire the stabilized weapon platform activities EMDigital, a British defense engineering and manufacturing company.

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The takeover reinforces Rheinmetall's portfolio of advanced naval systems and equipment, making the transaction "a significant strategic acquisition," the company said.

Meanwhile, the planned takeover of Volvo Aero of Sweden by British engineering company GKN has received approval from the European Commission under the EU Merger Regulation.

Both companies manufacture aircraft engine components -- such as fan cases and turbine exhaust cases -- for military and civilian aircraft.

"The commission's investigation confirmed that the proposed transaction would not significantly reduce the supply options available to customers of these components." The European Commission said.

Rheinmetall Defense, in announcing its acquisition, said the deal for EMDigital's stabilized weapon platform activities results in a new subsidiary -- Rheinmetall Advanced Stabilized Platforms. Rheinmetall is the majority shareholder in the subsidiary -- 51 percent -- while Seawood Ltd. holds the remaining 49 percent of shares.

"RASP's prime focus is the development and production of naval weapon stations and platforms," Rheinmetall said. "Rheinmetall is already well-established in this field, thanks especially to its MLG 27 light naval gun and the shipboard version of the Millennium automatic cannon.

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"The group can now supply the world's navies with an even wider array of made-to-measure components and complete weapon systems."

RASP, which has headquarters in London, will provide a range of modular platforms for small-caliber -- 5.56mm to 14.5mm and 40mm automatic grenade launchers -- and medium-caliber weapons naval applications.

The open system architecture of the platforms will allow integration of weapons and electro-optical sensors.

RASP will also develop and manufacture electronic components and subsystems for naval use, such fiber-optic gyroscopes.

In regard to the GKN-Volvo Aero deal, the EC said it based its finding on the presence in Europe of other manufacturers of engine fan cases and the ability of engine manufacturers to produce them in house.

"The commission concluded that these elements would ensure that the merged entity would continue to face a competitive constraint from third parties and that the supply options open to customers would not be significantly reduced as a result of the transaction," it said.

The investigation of the mergers was routine under EU rules for acquisitions and mergers for companies that exceed certain "turnover" thresholds and to guard against the stifling of marketplace competition.

Volvo Aero is a wholly owned subsidiary of the Volvo Group. In addition to engine components, the company also produces gas turbine components for power generation.

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GKN's aerospace division produces engine components and composite aircraft structures, as well as providing aftermarket services.

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