Getrag is to sell its entire Axle Business to GKN, while co-shareholders Dana Holding and Volvo Car will sell their respective shares in the corresponding companies at the same time.

Closing of this transaction is expected by the end of September this year, subject to the usal conditions and regulatory approvals.

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Getrag is also selling an exclusive licence for electric drivetrain technology to GKN to be used in electric and hybrid applications mainly in Europe and North America.

“The demand for our dual clutch transmissions steadily grows in China, Europe and America,” said Getrag corporate group CEO Mihir Kotecha. “We see our future in this technology and want to make sure that we are able to satisfy the growing number of customers.

“Although our axle business came successfully out of the economic crisis and grew steadily ever since, the sale offers a strategic advantage for all parties involved.

“The employees will have a secure and prosperous future with the new owner.”

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Getrag’s axle business is a Tier 1 supplier for all wheel drive and rear wheel drive driveline systems. The business comprises Getrag All Wheel Drive in Koping, Sweden and Cologne, Germany as well as Getrag Corporation in Sterling Heights, Michigan and Newton, North Carolina.

GKN said the acquisition cost comprises GBP283m (US$462m) in cash for the equity at closing together with a further deferred payment of up to GBP12m depending on Getrag Driveline Products’ success in achieving future business awards.

Presently Getrag Driveline Products has net cash of around GBP15m and therefore the current value, including the deferred element, is GBP280m.