Report: GKN in Talks to Sell Automotive Unit to Dana

British driveline specialist GKN plc is in talks to sell its automotive operations to Ohio-based Dana Inc., sources tell the Financial Times.

GKN has been trying since early January to fend off a hostile takeover bid from Melrose Industries plc, the English turnaround firm. GKN said late last month it will instead split off its automotive and aerospace units as separate businesses.

Dana and GKN formed a partnership in 1999 to develop drivelines for all-wheel and four-wheel-drive cars and light trucks. The alliance faltered when Dana went through bankruptcy restructuring in 2006-2008.

Dana, which has a market value of $3.8 billion, posted sales of $7.2 billion last year. Combining the GKN Driveline division with Dana would create a global driveline company that counts more than half of all light-duty vehicle producers as customers.