Mergers and re-birth
Downstream of the iron and steel-makers, other industries and companies had been rising – and would soon become part of the developing GKN story
In 1834, in Birmingham, John Nettlefold had opened a woodscrew mill. And in 1856, just down the road, Arthur Keen had founded the Patent Nut & Bolt Company (PNB) with his American partner, Francis Watkins, and which had become a major manufacturer of fasteners.
Arthur Keen was to become the architect of Guest, Keen & Nettlefolds and was a classic Victorian entrepreneur. He was the son of a yeoman-farmer, who rose from being a railway clerk to become a leading figure in West Midlands’ commerce and politics.
By the late 1890s, Keen not only headed PNB but was also chairman of the Birmingham and Midland Bank. Keen believed that PNB had to integrate vertically up the production chain into steel, which was replacing iron as the raw material for fasteners. With his financial connections, he was perfectly positioned for the financial engineering necessary to fulfil his objective.
Through a contact, Keen learned that Lord Wimborne was ready to sell the Dowlais Iron Co. As Dowlais was larger than PNB, this would be a reverse takeover. Stretching his resources to the limit, Keen agreed in September 1899 to pay Wimborne £1.53m for Dowlais. He told his shareholders that the deal would “give the company a position of complete independence...enabling it to hold its own in competition with the whole world.”
In July 1900, the combination of Dowlais and PNB was incorporated into a new group, Guest, Keen & Co. Two years later, Keen drove through the takeover of a reluctant Nettlefolds Ltd and the enlarged company became Guest, Keen & Nettlefolds.
In 1905, GKN was the 15th largest British company – with assets of £4.54m – and the largest iron, steel and coal group in the country. In July 1912, it received royal recognition when King George V visited Dowlais.