Last Monday, Ligeance Investments Ltd of Hong Kong finalized its acquisition of Gardner Aerospace, the UK-headquartered aero-structure components manufacturer in a deal worth more than £300 million (US$384.3 million). Ligeance is a subsidiary of Shaanxi Ligeance Mineral Resources (SLMR), a publicly listed Chinese mining company that is diversifying into the aerospace sector.
For Gardner (Hall 2b Stand E140), the acquisition represents an opportunity to expand into the rapidly growing Chinese domestic market, and is a major milestone on the journey that has turned an ailing conglomerate of 20 companies into a leading international manufacturer of aerospace components. Beginning in March 2003, a new management team succeeded in turning around the company’s fortunes and modernizing its operations. In 2010 the group received private financing that allowed it to expand, including the acquisition of factories in France and India.
Acquisition talks with SLMR began in the middle of last year. For the Chinese owners, purchasing Gardner represents an upward vertical integration of their business as it diversifies. SLMR has also established a joint venture to produce turbine fan blades in China. This draws on its rare earth mining activities to produce the special alloys. It has also joined forces with SF Express to develop a UAV for parcel deliveries.
Following the completion of the deal, Gardner will continue as before with consolidating and expanding its Europe-based business, underpinned by its position as a major supplier to OEMs such as Airbus and Tier 1 suppliers such as GKN, Spirit and Stelia Aerospace. The company employs nearly 1,500 and generates a turnover of £160 million. It has five factories in the UK, plus others in France, India and Poland.
Working with its new Chinese owners, the company is now establishing a manufacturing facility in China, initially to serve the domestic aerospace market. Gardner is bringing the full expertise of the company to the venture, to create, in effect, a mirror of its modern factories in Europe.
A factory is to be built in the Chinese “aerospace town” at Chengdu, with an aim of producing the first parts within two years. Marketing activity in China is also to begin shortly. The parent company will place initial orders to ensure that the new factory can deliver on-time, on-cost and on-quality, before real orders are accepted.