Goodwin in Advanced $1.5bn Negotiations to Sell Defence Assets to Cerberus
Goodwin's Defence Asset Sale: Key Developments and Market Impact
Sept 9 (Reuters) - British engineering group Goodwin is in advanced talks with U.S.-based private equity firm Cerberus Capital to sell parts of a division that houses its defence assets for £1.1 billion ($1.49 billion), it said on Wednesday.
Rising Demand and Market Reaction
The potential sale comes as demand has risen due to strong orders for precision-machined castings used in defence and nuclear projects, and increasing exports to the U.S. Navy.
Shares in the London-listed engineering company, which dropped 23% on Tuesday after the Financial Times first reported the deal talks, were trading flat on Wednesday.
Analyst Commentary on Valuation
"That (price) might be considered reasonable for some castings players – but not a key supplier to the U.S. and UK navies, with access to the latter’s continuous at sea deterrence programme," said John West, global head of analysis at Mergermarket, explaining Tuesday's share drop.
Background: Goodwin's Strategic Review
Timeline of the Sale Exploration
GOODWIN STARTED EXPLORING POTENTIAL SALE IN AUGUST
Goodwin, which makes industrial castings, valves, pumps and other specialist engineered products, in August started exploring a potential sale of parts of its mechanical engineering business as part of a broader strategic review.
Divisions and Assets Involved
The potential deal would cover a substantial part of Goodwin's Mechanical Engineering division, which includes Goodwin Steel Castings, Goodwin International, Noreva, Easat Group and Pumps, it said.
Performance of the Mechanical Engineering Division
The unit makes components for UK and U.S. naval ship and submarine programmes. It was a stand-out performer last year, growing revenues by nearly 39% in fiscal 2026.
Regulatory and Market Considerations
Government Scrutiny and Market Share
Any deal with a foreign buyer for Goodwin's defence assets would attract scrutiny by the UK government under the National Security and Investment Act.
The UK remains Goodwin's largest market by revenue at 29% of its total, but the U.S. market has grown its share to about 24%, according to its latest annual report.
Cerberus's Role and Response
Cerberus, co-founded by U.S. Deputy Secretary of Defense Steve Feinberg, did not immediately respond to a Reuters request for comment.
Additional Information
($1 = 0.7376 pounds)
(Reporting by Nithyashree R B in Bengaluru; Editing by Mrigank Dhaniwala and Jan Harvey)
