New Leadership Positions for GKN Following US Acquisitions

LONDON, August 3 -- GKN plc of the UK today announces two acquisitions in the US Aerospace and Offhighway sectors.

The acquisition of Stellex Aerostructures combined with GKN's existing advanced aerospace metals business will create a leader in titanium aircraft and engine structures.

And the acquisition of Rockford Powertrain will create the offhighway industry's leader in driveshafts for construction, mining and agricultural equipment.

Kevin Smith, Chief Executive of GKN plc, said: "We have been highly selective in the way we scrutinize acquisition candidates.

"These two acquisitions are the outcome of our rigorous insistence on buying businesses which provide technology and market leadership and which fit with our capabilities. Stellex and Rockford will jointly contribute $200 million to our 2007 revenues and will make a good contribution to Group profits and future growth."

See detailed announcements below.

GKN to Acquire US Aerospace Group and Create Leading Titanium Structures Business

GKN plc of the UK today announces that it has agreed to acquire Stellex Aerostructures of the US - a leading specialist in the manufacture of complex, metal structural components for the aerospace industry.

The combination of GKN's existing advanced composite structures and metals business with the operations of Stellex will create a leading manufacturer of titanium aircraft and engine structures.

GKN is already a world leader in advanced composite structures and is successfully taking advantage of the growth in composite content in both civil and military aircraft. There is also a growth trend in the use of titanium, which has complementary material properties and provides enhanced tensile strength with low weight.

Titanium structures will account for approximately 20% of the weight of the new F-35 Joint Strike Fighter and 15% of the Boeing 787 airliner - more than twice the levels of the aircraft they replace which will drive a doubling in titanium usage within the industry over the next ten years.

Approximately 65% of Stellex revenues are on civil aircraft which increases GKN's exposure to this sector. Stellex has secured strong positions on market leading civil programmes such as the Boeing 787 and 777 and in defence has a strong position on the F-35.

Stellex employs approximately 650 people on three US sites in New York, Kansas and California and has current revenues of more than $120 million with a strong future growth profile. GKN is acquiring the business, with reported gross assets of $71 million at December 31, 2005, from the Carlyle Group and management, the terms of which have not been released. The consideration will be satisfied from existing resources.

Marcus Bryson, Chief Executive of GKN Aerospace said:

"The creation of a leading manufacturer of titanium structures is complementary to our established composites strategy.

"Stellex is a highly regarded, premium supplier and fits very well with our existing activities in the US. Together we will be one of the aerospace industry's leading independent suppliers of complex, high performance, titanium structures -well positioned to capitalise on the significant long term growth in titanium content on new commercial and military aircraft.

"Based on current long term agreements with a range of customers and the growth demand for titanium structures we expect this acquisition to make a strong contribution to our growth strategy in aerospace."

The acquisition is subject to certain regulatory approvals and completion is expected later this year.

US Acquisition Transforms GKN into Global OffHighway Driveshaft Leader

GKN plc of the UK today announces the acquisition of Rockford Powertrain of the US, a producer of high speed driveshafts focused on the construction and mining equipment sector.

Rockford's high speed driveshafts are complementary to GKN's current, low speed products which are aimed primarily at the agricultural equipment sector.

The newly-combined product portfolio will satisfy the increasing demand by major original equipment manufacturers to consolidate the sourcing of their offhighway driveline systems purchases from a single lead supplier.

Based in Illinois, Rockford employs 185 people in the US and has outsourced an increasing proportion of its manufacturing to low labour cost countries, principally China, while retaining a strong US engineering and technical presence.

GKN is acquiring the business for a consideration of $50 million which is being met from existing resources. Rockford has current annual revenues of $60 million.

Martyn Vaughan, Chief Executive of GKN OffHighway, said: "This acquisition fits closely with our strategic criteria for OffHighway. It improves our penetration of both the US and construction sectors - 95% of Rockford's sales are in the US with more than 85% going to construction and mining equipment manufacturers. Rockford also enjoys a low cost manufacturing base and its products are acknowledged as technology world leaders."

The construction industry has enjoyed buoyant growth for the past three years and these conditions are expected to continue.

Rockford's driveshafts, which connect the engine and drive axles to a vehicle's transmission operate at up to 6,000 rpm and can handle power outputs from 150 to 2500 horsepower.

For further information: GKN Corporate Communications, +44(0)-20-7463-2354