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GKN, Brambles eye pact
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January 15, 2001: 6:11 a.m. ET
British and Australian firms mull closer link in industrial services
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LONDON (CNNfn) - Australia's Brambles Industries and Britain's GKN are in talks about merging their industrial service activities, the companies said Monday.
The firms, which are partners in pallet rentals and waste management, gave little detail on the possible deal and said there is no certainty an agreement will be reached.
Analysts said a corporate structure change could, however, be a step toward an initial public offering for the combined industrial services unit.
"If it's ultimately to realize value for an IPO in the future, that is clearly good news for GKN's shares," said Harry Philips, an analyst at investment bank WestLB Panmure.
 Shares of GKN (GKN), which is currently valued at about £5.5 billion ($8.1 billion), were up 3.4 percent at 785.75 pence on the London Stock Exchange early Monday. In Sydney, Brambles, now valued at about A$9.7 billion ($5.4 billion), rose 10 cents to close at A$41.60.
Analysts said that a merger of their industrial service businesses alone wouldn't necessarily bring a lot of synergies and the companies' statement also left it unclear exactly which parts of their industrial services they were planning to merge.
Brambles and GKN, a maker of aerospace, industrial and automotive products and owner of U.S. muffler repair firm Meineke, have long been joint venture partners in CHEP, an industrial pallet provider, and waste management company Cleanaway.
Brambles operates a variety of business-to-business services in Australia and overseas.
Legal, structural, financial, governance and regulatory issues in Australia and the U.K. need to be worked out for the deal to go through, the companies said. 
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GKN
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