Britain’s GKN Driveline could finalize a merger with the US’s Dana Incorporated – a name that’s all but synonymous with Jeep’s rugged Wrangler off-roader – within the next two weeks, according to a report from Reuters. Sources told the publication that Dana has hired British multinational financial services company Barclays to represent the company during the merger talks, although Barclays has declined to comment on the matter.
Although Dana is well known as a longtime supplier of drive axles for certain Jeep models, Fiat Chrysler Automobiles is no stranger to GKN Driveline, either. Notably, the company’s drivetrain components are what give the new, 5,300-pound Jeep Grand Cherokee SRT Trackhawk its ability to sprint from 0 to 60 mph in just 3.5 seconds reliably.
In January, GKN rejected an attempted hostile takeover by Melrose Industries – a British investment company that specializes in acquiring and turning-around underperforming businesses. GKN had planned to spin off its Driveline business, but now, the company is saying that merging that unit with Dana could provide better value to shareholders.
One of the potential obstacles to a merger, Reuters says, is that Dana reportedly plans to use its own stock to finance most of the transaction. Shares in Dana Inc. have lost 19 percent of their value since the start of 2018, and could lose even more as investors continue to be alarmed by the possibility of a trade war between the US and Europe, over US President Donald Trump’s proposed tariffs on imported steel and aluminum.