U.K. engineering group GKN PLC (GKN.LN) has bought the aircraft engine division of Swedish truck maker Volvo AB (VOLV-B.SK) for SEK6.9 billion ($1 billion), the two companies said Thursday.
Volvo said the divestment would boost its operating profit in the third quarter by about SEK200 million and reduce its net debt by approximately SEK5 billion.
The transaction is pending approval from the relevant authorities and is scheduled for completion in the third quarter.
"GKN is a strong new owner for Volvo Aero," Volvo Chief executive Olof Persson said in a statement.
GKN is a global engineering company serving the automotive, aerospace and land systems markets. It has 45,000 employees and its sales last year totaled GBP6.1 billion, of which GBP1.5 billion was accounted for by GKN Aerospace.
Volvo Aero designs, engineers and manufactures components and sub-assemblies for aircraft engine turbines. It employs 3,000 people in Sweden, Norway and the U.S.
Write to Christina Zander at email@example.com
(END) Dow Jones Newswires
July 05, 2012 04:35 ET (08:35 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.