Cerberus to acquire Goodwin defence assets in $1.5bn deal

UK engineering firm Goodwin has struck a $1.49 billion deal to sell a key slice of its defence-focused Mechanical Engineering division to US private equity giant Cerberus Capital Management, according to a Reuters report. The transaction includes Goodwin Steel Castings, Goodwin International, Noreva, Easat Group and Pumps, all of which produce components for naval vessels and submarine systems in the UK and US.

The sale comes as there is a surge in demand for precision-engineered castings in defence and nuclear contexts, along with a rise in exports to the US Navy. Goodwin reported that its Mechanical Engineering unit performed well in the most recent fiscal year, with revenues soaring by nearly 39% in fiscal 2026. The business had been considering divesting parts of its Mechanical Engineering division since August, as part of a wider strategic review.

The proceeds from the sale will be returned to shareholders in significant part. The deal's announcement sent Goodwin's shares tumbling, with the stock plunging 23% on Tuesday and falling another 4% on Wednesday. Some analysts have expressed concerns over the deal's valuation, given the strategic significance of the assets. John West, global head of analysis at Mergermarket, questioned whether the price was justified, suggesting it might be reasonable for a casting business but inadequate to reflect Goodwin's crucial role as a supplier to the UK and US navies.

The transaction will likely be subjected to scrutiny by the UK government under the National Security and Investment Act, which empowers ministers to intervene in deals involving assets deemed crucial to national security. Despite this, Goodwin's UK operations remain its biggest revenue generator, contributing 29% of the group's total, while the US accounts for around 24%, as per the company's latest annual report.