Slaughter and May is advising GKN plc on the proposed combination of its automotive business and Dana Inc

Slaughter and May is advising GKN plc on the proposed combination of its automotive business and Dana Inc, a NYSE-listed global leader in vehicle drive systems.

The combination is being undertaken as part of GKN’s defence against a share and cash unsolicited offer by Melrose Industries plc announced on 1 February 2018, which has been rejected by the Board of GKN.

On both the proposed Dana Inc combination and Melrose offer, Slaughter and May is working closely with a Cravath, Swaine & Moore LLP team led by Richard Hall, George Schoen and Jenny Hochenberg.

The proposed Dana Inc combination values GKN Automotive at a total enterprise value of approximately £4.5 billion (US$6.2 billion). As part of the transaction, an IAS 19 pension liability at 31 December 2017 of £780 million will be transferred to Dana plc, net of deferred tax asset transferred to Damson plc of £132 million.

The proposed combination will be effected through the demerger of GKN Automotive to a new UK plc (“Dana plc”) and the merger of Dana Inc under Delaware law with a subsidiary of Dana plc. GKN shareholders will own 47.25% of the fully diluted share capital of Dana plc and GKN will receive cash proceeds of approximately $1.7 billion.

The combination is conditional on, amongst other considerations, approval by GKN and Dana shareholders and the lapsing of the Melrose offer.