GKN will pay 42 million pounds ($67.5 million) in cash for Pilkington Aerospace Ltd and Pilkington Aerospace Inc.
The deal will allow Pilkington to focus on the automotive and construction markets and make GKN the world's number one maker of military aircraft windows. It will also give GKN access to the key U.S. markets.
"Our strategic goal in aerospace is to be a world leader in our primary markets," said Neal Keating, Managing Director of GKN Aerospace Services, in a statement.
Europe's aerospace and defence firms are pushing to expand their manufacturing operations in the United States, the world's biggest defence market, in the hope of winning more deals there.
The Pilkington business GKN is buying supplies U.S. commercial jet maker Boeing Co (nyse: BA - news - people) and regional and business jet manufacturers including Brazil's Embraer SA and Cessna of the United States.
The deal, which requires regulatory approval, will also give GKN a leg up in the burgeoning U.S. defence market.
The United States is set to pour $380 billion into defence in 2003, while in the rest of the world defence spending is expected to total about $420 billion, said GKN, citing the Defense Export Sales Organisation.
For its part, Pilkington is shedding non-core businesses to concentrate on building products and automotive businesses.
The firm has slashed thousands of jobs in recent years to contain costs. Along with many construction-related firms, it has suffered from an economic slowdown that has hit demand